Kerala borrows Rs1,500 crore from RBI to pay salaries, pension

Reserve Bank of India
This is the first time since October 2013 that the central bank has hiked borrowing costs at two consecutive policy meetings: Photo | Reuters

Thiruvananthapuram: Kerala has borrowed Rs1,500 crore from the Reserve Bank of India (RBI) to pay salaries and pensions in June.

The state government borrowed Rs1,000 crore at 6.55% for 10 years and Rs500 crore at 5.44% for four years in the bond auction held by the RBI on Tuesday.

This is the fifth loan the state has availed from the RBI in two months, taking the total debt amount to Rs10,430 crore in the current fiscal year. The total permissible loan amount in this fiscal is Rs 45,217.

The state has been grappling with falling finances as businesses took a huge hit due to the COVID-19 lockdown. It received only Rs335 crore as IGST from the Centre for the month of April, a big fall from the average Rs800-1000 crore in earlier months.

The state is yet to receive the Rs3,000 crore it is entitled to as compensation for GST losses. It has got the compensation only till November 2019.

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