K.N. Balagopal | Photo: Mathrubhumi
Thiruvananthapuram: After the union government decided to end the compensation for Goods and Services Tax, Kerala witnesses an average gap of Rs 5,900 cr every month in its income and expenses.
As per the report of Comptroller and Auditor General, the temporary estimate of the finances of Kerala for July are: Rs 8,709.1 cr of income and Rs 14,616.45 cr of expense. The difference is Rs 5,907.35 cr. Of this, only Rs 4,166.54 could be met from loans.
This month, the Onam expenses drained the treasury and the state has already touched the upper limit of the Ways and Means Advances from RBI to run day-to-day affairs. When the treasury opens on Monday, Kerala is staring at the possibility of going overdraft.
This is not the first time Kerala is facing a similar situation. However, what worries the state this time is the control on the borrowing limit by the union government and the end of GST compensation. Finance minister KN Balagopal has been saying that the state will witness a reduction of Rs 23,000 cr in the income this financial year due to the curbs. The limit on loans was brought in after the union finance ministry argued that the borrowings of Kerala Infrastructure Investment Fund Board and Kerala Social Security Pension Limited (KSSPL) fall under the kitty of the state.
The income of the state is not increasing on par with the hike of expenditure. The salary revision caused an increase of up to 30 per cent in the expenses. But income improved only by 10 per cent.
At present, the finance ministry's approval is required to cash bills above Rs 25 lakh. More restrictions will be placed if the situation does not improve soon. Earlier, this limit was brought down up to Rs 5 lakh.