Kerala demands borrowing limit to be 5% without conditions

KN Balagopal
Minister KN Balagopal met Union Finance Minister Nirmala Sitharaman in New Delhi on Thursday.

Thiruvananthapuram: The State government has asked the Centre to increase its borrowing limit to 5%, unconditionally. State Finance Minister KN Balagopal said this after his meeting with Union Finance Minister Nirmala Sitharaman in New Delhi on Thursday.

The minister said that though permission was given for 5% last year, when the COVID-19 situation was severe, it was bound by conditions that wasn't favourable. “Only 3.5% of the total was without any conditions and 0.5% was capital expenditure and another 0.5% was related to power sector reforms, which were not beneficial to the State,” Balagopal said at a press conference in the national capital.

The State has met conditions stipulated under one-nation-one-ration card and ease-of-doing-business, said Balagopal. He claimed that several other states, including Telangana and Maharashtra, have also raised similar demands. He added that while there was no positive response to the concern, the Union minister had said that it will be considered.

The minister also demanded a moratorium on repayment of loans, especially by small borrowers. He also asked for an immediate payment of GST compensation dues worth over Rs 4,500 crore from the Centre.

Balagopal said that the State also pressed for a special scheme to help the Micro, Small and Medium Enterprises (MSME) that have been hit by the pandemic. “The Centre is yet to announce a special scheme for this category. We have requested for low-interest loans and also setting up a moratorium on loans,” the minister said.

Balagopal claimed that more than half the number of phone calls received in his office daily were related to low-interest loans and moratorium. “It is a severe issue in the State where lending firms are threatening people who have taken loans. The State government will take severe action against such firms,” he added.

According to the minister, various plans for revival of the agriculture sector were also discussed at the meeting. “Several sectors such as cashew, coir, handloom and plantation are on a standstill in the State. We proposed various innovations for example mixing rubber with bitumen can be a viable solution for improving the roads and helping the sector in turn,” said the minister. He, however, added that the Union ministry is yet to give any assurances on the proposals.

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