Thiruvananthapuram: In the face of a severe financial crisis, the Kerala government is making plans to borrow money for salary disbursements. The decision to seek loans from cooperative banks was made after exhausting the limit set by the central government for borrowing money. Simultaneously, the state plans to communicate with the centre regarding the acute financial challenges it is grappling with.
The loan is set to be managed through a cooperative bank based in Kannur. The decision to borrow funds for salary disbursements comes as the state grapples with challenges in meeting its financial commitments, particularly concerning salaries and pensions.
The government plans to resolve the financial crisis by utilising the borrowed amount and unspent scheme funds to pay salaries. A newly established pension company, designated for community pension distribution, is set to secure loans from public sector institutions. The finance department thinks that using these funds for pensions will effectively address the current economic challenges, with the government guaranteeing the allocated amount. It has also been agreed that the loan can be repaid in one and a half years.
A consortium comprising primary cooperative societies, agricultural cooperative societies, and employees’ cooperative societies, which presently have sufficient funds, will take the loan. The funds obtained through this consortium will be managed by the Madai Co-operative Rural Bank in Kannur. The finance department has also opted to open a new account at Kerala Bank for the disbursement of the loan amount.
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