Centre fixes Kerala’s net borrowing limit at Rs 32,440 cr; final approval pending

SN Jayaprakash

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Representational Image: AP

Thiruvananthapuram: The Centre has set the net borrowing limit for Kerala at Rs 32,440 crore for the fiscal year 2023-24, but final approval from the Centre is still pending.

Kerala has been granted temporary permission to raise Rs 2,000 crore from public markets, of which it has already borrowed Rs 1,500 crore.

The borrowing limit of the state was kept at Rs 32,430 crore in the previous financial year and only a nominal hike has been introduced for the current fiscal.

Permission to borrow for the first nine months of a financial year is typically granted by the Centre in April. However, this has been delayed in 2023, as it was in 2022-23. The previous fiscal year witnessed a series of tussles between the Centre and the state, with the former withholding permission for the state to borrow indefinitely. Eventually, the Centre granted temporary approval to borrow Rs 5,000 crore, and later released a final order that imposed cuts to the borrowing limit.

In the previous year, the Centre had cut the borrowing limit of Kerala after including the debts of Kerala Infrastructure Investment Fund Board (KIIFB) and Kerala Social Security Pension Ltd. (KSSPL) in the state's kitty. The union government also informed the state that at least Rs 3040 crore will be reduced annually for four years in this manner. Hence, the Centre may cut a share of off-budget borrowings availed for KIIFB and the welfare pension from the net borrowing limit of the state.

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