THIRUVANANTHAPURAM: The finance department has decided to allot Rs 25 crore immediately in order to tide over its financial crisis caused by low sale and government arrears. The Centre will also give Rs 25 crore.

On February 24 Kerala Kaumudi had carried a news item, revealing that the government may push the SupplyCo also (like in the case of KSRTC) into bankruptcy after it showed reluctance to grant financial aid or clear the bills of goods it had purchased.

The government has to pay Rs 66.72 cr to the SupplyCo towards the purchase of goods to be distributed in Ration Shops as per Food Safety Act. Out of that, decision has been made to pay Rs 25 crore first and rest amount of Rs 112 cr, without delay.

Last year alone, the government had to pay Rs 419 cr to the SupplyCo. This, added with the loss of Rs 135 cr of the last financial year started suffocating the corporation financially.

The government’s outstanding payment to the SupplyCo till date is Rs 1982 cr. As financial state worsened, SupplyCo MD M S Jaya wrote to the food department to pay up at least a part of the arrears. The department rejected the request, citing poor financial state of the government. Instead, it agreed to increase the limit of loan the corporation could borrow from banks.

The Centre will be allotting Rs 25 cr set apart for procurement of grains, besides Rs 25 crore given by the State. Thus the Supplyco intends to manage the present crisis without taking bank loan.