THIRUVANANTHAPURAM: Minister KN Balagopal said during the question session in the Legislative Assembly that the Central government is suffocating Kerala by cutting the borrowing limit. There has been a huge reduction in the central allocation compared to last year. While many states bear 40 per cent of the expenditure themselves and depend on the Center for 60 per cent, Kerala bears 70 per cent.

As the credit limit is not increased, the state is on a drive for development and welfare activities by increasing its own tax and non-tax revenue and reducing expenditure. The state's borrowing limit is three percent of GDP. This means that Kerala can borrow Rs 32,442 crore this financial year but the Center has cut the loan limit citing the loans of Social Security Pension Company and KIIFB. This will derail the development priorities of the state in the budget.

Kerala's share of central tax revenue is decreasing every year. Such discrimination is due to the unscientific setting of standards. The Minister informed Mani C Kappan, Monce Joseph, Anoop Jacob and PJ Joseph that with the implementation of Goods and Services Tax, the states have been limited in their interventions to increase taxes.