Thiruvananthanapuram: The Kerala Government has decided to borrow Rs 1,500 crore more for paying next month’s salary and pension.
The money is being borrowed in the name of development activities.
The auction of the debt instruments will take place through the e-Kuber portal at the office of the Reserve Bank of India (RBI) at Fort, Mumbai, on December 27. (Governments raise money from the market to fund its fiscal deficit through dated securities and treasury bills.)
Kerala was initally eligible to borrow Rs 2,000 crore more for this financial year.
The borrowing limit went up to Rs 6,060 crore after the Centre last week permitted the State to borrow Rs 4,060 crore, after taking into account the State’s good performance in the electricity sector.
In November too the State had borrowed Rs 2,000 crore through RBI debentures in a bid to distribute salary and welfare pension for that month.
The borrowing was made at an interest rate of 7.83 per cent with a repayment tenure of 23 years.
As many as 55 lakh individuals are receiving a welfare pension of Rs 1,600 each in the state, as of now. About Rs 774 crore is needed to distribute the welfare pensions in the State every month.
During the first term of the Pinarayi government, the practice was to distribute welfare pensions for three or four months together during the festive seasons of Onam, Vishu and Christmas.
For a long while the State has been struggling to pay the salary for government employees and the pensions for retired employees. Adding to this burden are the welfare pensions.
