Financial crisis worsens in Kerala, treasury likely to be shut down; Onam expense exceeds Rs 10,000 crore

KUNNIKODE: The government is concerned that the treasury operations will have to be stopped for the time being as the financial crisis in the state has worsened. This happened due to less availability of borrowings, decline in income, huge increase in expenditure and additional expense during Onam season. There is no reserve in the treasury.

Rs 10,000 crore has been spent so far during Onam by paying salaries and pension. This was found by taking the money in the treasury and the public debt of about Rs 5,000 crore that had been kept as reserve in the last three months in view of Onam. Rs 1,683 crore were also taken from the Reserve Bank. Rs 1,400 crore has been spent out of this. The rest will be finished within a day.

After that, the state has to rely on overdraft. Rs 1,650 crore will be received. Repayment is due within two weeks. If there is a delay, the Reserve Bank will move to measures including treasury control. In the remaining days of this month, the revenue income is less likely to arrive. Nothing including GST compensation from the Centre is due. Less than Rs 500 crore tax share will be available.