Thiruvananthapuram, Kerala: Kerala government is set to borrow Rs 1,800 crore from the open market, marking the first borrowing by the new government led by VD Satheesan after assuming office.

The Centre has permitted the state to borrow up to Rs 23,000 crore till December. Earlier this month, on May 12, the state had already raised Rs 2,800 crore.

The fresh borrowing comes as the government prepares to meet major expenditure commitments, including salaries and pensions for government employees, welfare pension disbursals, and newly announced benefits by the government.

The auction of government securities to be issued through the Reserve Bank of India is scheduled to be held on May 26.

Earlier this week, the government announced the formation of a special committee to prepare a White Paper on Kerala's financial condition.

The committee will be headed by former Cabinet Secretary K M Chandrasekhar, and Additional Chief Secretary (Finance) K R Jyothilal has been appointed as convener, Chief Minister V D Satheesan said.

Economist Dr Narayanan and Centre for Development Studies (CDS) Director Dr Veeramani are the other members of the committee, he said.

Following a meeting of his Cabinet after the swearing-in ceremony, Satheesan had announced the white paper to give people a clear picture of the state's financial health.

In the run-up to the Assembly elections, the UDF has alleged mismanagement of Kerala's finances under the previous Left Democratic Front government. 

Meanwhile, it remains unclear whether the UDF government will retain the Kerala Infrastructure Investment Fund Board (KIIFB) after sharply criticising the previous LDF administration over its functioning, even as it moves to curb the board’s independent market borrowing powers.