Thiruvananthapuram: The Centre has informally informed Kerala that it can borrow an amount of Rs 32,440 crore during this financial year. However, the state cannot avail loans at this juncture as an official order in this regard is yet to be issued.
In view of such a situation, officials in the state’s Finance Department said that it would not be possible to distribute welfare pensions every month and pay the salary and pension arrears at present even though the fiscal condition has improved.
The state is awaiting clearance from the Centre for availing credit for the nine months till December. At the same time, Kerala is worried about whether the Centre would slash the borrowing limit this financial year as it had done last time.
Last financial year, the Centre had initially set a borrowing limit of Rs 32,400 crore for the state. But the amount was later slashed by Rs 5,800 crore. In fact, the Centre’s move was aimed at reducing an amount of Rs 14,312 crore which had been secured as loans by KIIFB (Kerala Infrastructure Investment Fund Board) and the company set up to distribute welfare pensions from the borrowing limit over a period of five years.
Meanwhile, the CAG (Comptroller and Auditor General) released a report which said that the financial condition of the state has improved. This was possible by reducing expenses. Even then, the state’s Finance Department is of the view that better finances would only enable it to meet day-to-day expenses.
Pending expenses of the state government include pay hike arrears and leave surrender of government employees and teachers in UGC scale and monthly welfare pension distribution. In fact, the government has yet to pay welfare pensions since March this year.
