Representational Image | Photo: Reuters|file
Thiruvananthapuram: The delay in union government permission for Kerala to borrow money from the public market has hit welfare pension distribution. Social security pensions and government-funded welfare fund pensions have been put on hold.
It is anticipated that pension distribution will resume in June, with one month's pension distributed at that time. Additionally, the pension from certain welfare funds, which generate their own income through member contributions, have also been temporarily suspended.
Last year, Kerala faced a similar issue, resulting in the state protesting against the delay. The Union government forced the state to deduct the loan taken by the Kerala Infrastructure Investment Fund Board (KIIFB) and Kerala Social Security Pension Limited (KSSPL) from the state's loan limit, in instalments. Previously, permission was granted in mid-April each year.
This year, the union government has set the maximum loan limit at Rs 32,440 crore. Most of this amount is obtained through debentures issued by the Reserve Bank of India, which is public market lending. The final approval specifies the amount that can be borrowed within the allocated limit. Currently, there is temporary permission to borrow Rs 2,000 crore, which has been utilised. The government is concerned about the delay in approval, particularly during a financial crisis when significant expenses need to be met through loans. Negotiations are underway with the finance ministry to expedite the approval process.
Last year, the union government decided to reduce the state's loan limit by Rs 3,750 crore over four years by considering the loans taken for KIIFB and welfare pensions. Disputes related to this matter are causing the current delay in approval. Furthermore, it is expected that the amount to be taken for KIIFB this year, estimated at Rs 5,000 crore, will also be reduced. However, the state government has made an amendment to exclude the loan taken by the KSSPL, by ending allocation from motor vehicle cess tax. Consequently, the state government asserts that the loan taken by the welfare pension company cannot be considered as part of the state's loan limit.