State faces an escalating financial crisis impacting all sectors, with even pro-government organizations going on strike. A significant amount is urgently needed to settle dues across various sections indicating a dire situation. The primary reason for this crisis is believed to be the financial strain imposed by the central government on Kerala.

AITUC, a part of the government emphasized that solely blaming the center won't solve the state's financial issues. KP Rajendran, AITUC State Secretary highlighted the need for the government's involvement in addressing pending obligations notably supporting the ongoing strike by school cooking workers demanding their overdue wages.

Multiple sections, including weavers owed 20 Crores for handloom uniforms and contractors awaiting over Rs 1600 crore, pressurize the government for unpaid dues. The delay in payments has also affected Supplyco stores, causing shortages of essential goods and potential price hikes on subsidized items.

The delay in settling arrears also impacts the completion of crucial renovation works post the rainy season, with contractors reluctant to take up projects due to pending payments. Government employees and teachers contemplate strikes due to withheld benefits like dearness allowances.

Local development activities suffer, affecting the state's overall growth as many local bodies struggle to complete even half of their projects within the financial year. Amidst mounting arrears, the government seeks partial solutions while the larger financial crisis persists, signaling a need for more sustainable resolutions.