Kerala to borrow Rs 2,000 cr more as salary-pension expenses choke state exchequer once again

Representative Image | File Photo: G Shivaprasad /Mathrubhumi

Thiruvananthapuram: Kerala government will borrow Rs 2,000 crore more, thus adding to the state’s borrowing this fiscal year, which is at Rs 13,436 crore.

The borrowing is within the limit prescribed by the union government. But, this is the second borrowing within two weeks.

Apparently, the move comes at a time when the state exchequer is struggling to meet salary and pension expenses for the coming month. Similarly, reports pointed out that the government has not yet decided on welfare pension distribution, which will require Rs 870 crore.

The state has been depending on the auction of bonds issued through the Reserve Bank of India(RBI) to pool the money. The same method will be used this time too. The auction will happen on November 1.

Earlier, the union government shelved the state’s borrowing limit. As a result, the government can only borrow Rs 17,936 cr till December. That means, with the present borrowing, the state government will only be able to borrow around Rs 4,500 crore.

However, the state government pins hope that the union government will extend the limit after December. If the union government does not take a favourable stand, then the state government apparently will face the heat of a financial crunch.

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