War of words between Kerala FM Balagopal, MoS Muraleedharan over state's borrowing limit issue

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Kerala finance minister KN Balagopal

Thiruvananthapuram, May 29 (PTI) A war of words erupted on Monday between Union Minister of State for Parliamentary Affairs V Muraleedharan and Kerala Finance Minister K N Balagopal regarding the alleged reduction in the state government's borrowing capacity with both blaming each other of trying to mislead the public on the issue.

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Muraleedharan claimed it was the "financial mismanagement and extravagance" of the LDF government that resulted in the financial crisis Kerala was facing and it was the reason for the state's huge debt.

He also refuted the allegations of the ruling Left government in Kerala that the Centre had reduced the borrowing capacity of the state.

Hitting back, Balagopal said Muraleedharan was trying to mislead people and achieve political gains through such baseless and objectionable statements.

Earlier in the day at a press conference held here, Muraleedharan termed as an "extravagance" the honorarium approved for expelled Congress leader K V Thomas, now appointed as the state's representative in New Delhi, and the foreign trips of Kerala Chief Minister Pinarayi Vijayan and the state's ministers.

The minister further said some of India's neighbouring countries were in dire economic straits due to their financial policies and as the Centre did not want a similar situation here, restrictions were placed on borrowings by states.

"So, I would like to ask the state finance minister and the chief minister not to foist the blame for it on the central government," Muraleedharan told reporters at the press conference held by him.

The Union minister said he was not sure whether Chief Minister Vijayan and State Finance Minister Balagopal were blaming the Centre "because they lacked knowledge about such matters" or if it was a "deliberate and conscious" attempt to mislead the public.

Responding to the allegations and contentions of Muraleedharan, Balagopal, later in the day, said the Union Minister gave "inaccurate figures" and "made baseless arguments for political gains and to mislead the people". "Such a stand is highly objectionable," he said in a statement.

Muraleedharan's contentions came in the wake of Vijayan lashing out at the BJP-ruled Centre by terming its alleged move to reduce Kerala's borrowing capacity by half as "sadistic".

Two days before that, Balagopal had contended that it was "part of the Union government's political vendetta". Balagopal had also claimed that no reason was given for cutting the state's borrowing limits by half.

Refuting the allegations of the LDF government, Muraleedharan cited figures of the borrowings allowed for the state and how much of it has allegedly already been availed of by Kerala.

The Union minister said that for the financial year 2023-24, Kerala was allowed to borrow Rs 32,442 crore as 3 per cent of its Gross State Domestic Product (GSDP) in accordance with the recommendations of the 15th Finance Commission.

Additionally, it was also permitted Rs 20,985 crore under replacement borrowing and besides that, Rs 1,755 crore was sanctioned for the state as central contribution under the National Pension Scheme (NPS), he said.

"In total, Rs 55,182 crore is allowed to be borrowed in this financial year and out of that Rs 34,661 crore has already been taken by the state till now. Of the remaining Rs 20,521 crore, the Centre sanctioned Rs 15,390 crore for the first nine months.

"The balance Rs 5,131 crore would be given towards the end of the financial year," the minister said.

He said if the amount for the last quarter was denied by the Centre, then there may be some weight in the claims by Balagopal, but the Union government has not said anything like that.

"So where is the reduction? Therefore, there is no question of political vendetta. Either the Finance Minister and Chief Minister have no clue about how these figures were arrived at or they are deliberately and consciously trying to mislead the public," Muraleedharan contended.

Balagopal, countering claims of the Union Minister and the figures cited by him, said that after receiving a letter from the Centre that Kerala's approved borrowing limit was Rs 32,000 crore, another communication was received on May 26 stating that Rs 15,390 crore has been sanctioned for this year.

The May 26 letter further said that out of the Rs 15,390 crore, the state can only borrow Rs 13,390 after deducting the Rs 2,000 crore sanctioned in April, the Finance Minister claimed.

"In this context, it is extremely embarrassing that the Union Minister of State himself has come up with a misleading figure," he said.

Balagopal also questioned why details of borrowing limits of the state were being sent "secretly" to a Union Minister of State instead of directly to the state government.

He said that the Left government has a clear idea about its debt and how much it can borrow and so does the central government.

However, the Union minister was coming forth with "baseless arguments" hoping that if someone is misled by it, let them be, Balagopal alleged.

Muraleedharan, in his press conference earlier in the day, claimed that according to a recent RBI report, Kerala was one of the five states in the country with the highest debts and asked why the state required so much money.

"Is it to pay honorarium to people like K V Thomas, who probably already gets pension for being a former teacher and a former MP? Is it for foreign trips of the CM and the ministers?

"This kind of extravagance cannot be permitted by the Centre as otherwise we might end up in the same financial situation as some of our neighbouring countries. That is the reason for the restrictions on borrowing by states," Muraleedharan said.

The CPI(M)-led LDF government in Kerala last week approved an honorarium of Rs 1 lakh per month for its Cabinet rank special representative, expelled Congress leader K V Thomas, in New Delhi.

The decision was taken in a Cabinet meeting. Besides the honorarium, the Cabinet also allowed Thomas to hire two assistants, one office attendant and a driver.


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