Soaring financial crisis: Kerala govt to borrow Rs 2000 crore

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Chief Minister Pinarayi Vijayan with Finance Minister KN Balagopal | Photo: Mathrubhumi

Thiruvananthapuram: Kerala government has decided to borrow Rs 2000 crore and with this the total borrowings of the state will touch Rs 15,436 crore this year. The union government has allowed the state to borrow Rs 17,936 crore till December. The government has resolved to take debt for distributing salaries and pensions in the first week of December.

The financial crunch in the state is likely to aggravate if the Centre does not permit to avail further loans after December. The ongoing financial constraints have urged the government to stall several projects and pensions including social security pensions and welfare pensions. Though a surge has been noted in the GST compared to the previous year, this revenue would not be enough to settle the issues.

The states are allowed to borrow up to 3 per cent of the domestic revenue. Kerala Finance Minister KN Balagopal had requested Union Minister Nirmala Sitharaman to increase this limit to 4 per cent following the GST compensation received by the states being halted. However, the Centre denied the request.

Kerala informed the Centre that it has to give Rs 1548 crore as GST arrears till date.

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