THIRUVANANTHAPURAM: In a move that goes against the directive of the central government, the Kerala state government has made the decision to borrow an additional Rs 1,000 crore. This decision comes amidst a financial crisis faced by the state. The borrowing is set to take place through an auction to be held on the 11th of this month at the Mumbai Fort office of the Reserve Bank.
With this new borrowing, the total amount borrowed by the Kerala government this year alone will reach Rs 9,000 crore. It has been reported that the borrowed funds will be utilized to meet the welfare pension for the month of April.
The Kerala government had earlier requested the central government to raise the state’s borrowing limit, citing the requirements of the Kerala Infrastructure Investment Fund Board (KIIFB) and welfare pension. However, the central government, considering the excessive expenditures incurred by the Kerala government, has imposed a limit on the borrowing capacity.
In an attempt to address the mounting debts and their social implications, the Finance Department of the Kerala government has issued a circular. The circular restricts the issuance of salary certificates to state government employees seeking loans, emphasizing the potential dangers associated with increasing debt among employees.
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