THIRUVANANTHAPURAM: Finance Minister KN Balagopal has requested the Centre to allow Kerala to borrow an amount equal to Rs 5,580 crore spent on national highway land acquisition as the financial condition of the state is dire. The demand was raised in a meeting with Union Finance Minister Nirmala Sitharaman in Delhi.

The state has to bear 25 percent of the amount for national highway land acquisition. 6769 crores is to be spent on this. 5580 crore has already been disbursed through KIIFB. As the borrowing limit of the state has been exceeded, it is demanded that an amount equal to this be allowed to be borrowed.

The Centre has cut the annual borrowing limit by Rs 8,000 crore this year. 8400 crore less in revenue deficit grant. The tax rate has been cut from 3.875 percent to 1.92 percent, resulting in a major reduction in revenue. It is in this context that such a proposal was put forward.

KIIFB and Social Security Pension Company have also sought reconsideration of the decision to reduce the borrowing limit by considering the amount collected for the year 2021-22 as a state loan with retrospective effect. Kerala is allowed to borrow 21850 crores this year. Out of this, 1850 crores can be borrowed for the remaining five months of this financial year.

Two months ago, there was a request to sanction a financial package considering Kerala's special economic crisis or to allow additional borrowing of one percent of the gross domestic product, but there was no favourable decision from the Centre.