Govt to raise 1.5k-cr amid financial crisis

Thiruvananthapuram: The state government has decided to raise Rs 1,500 crore from the market as Kerala continues to be in a financial crisis.
A statement issued by the finance department said that the government decided to raise the amount and use it for developmental activities in state. However, it is also learnt that the funds are meant for the disbursal of salaries and pensions next month.
The state’s main committed expenditure include salaries, pensions and interest payments on loans and the revision of salaries and pensions based on the recommendations of the 11thpay commission alone has caused an additional burden of Rs 15,000 crore annually to the exchequer.
The government has been maintaining that with the discontinuation of GST compensation by Centre, Kerala is facing a shortage of Rs 12,000 crore every year. In addition, another Rs 6,700 crore is the revenue deficit grant this year.
With liabilities of KIIFB and the social security pension board also being brought under the state’s responsibilities, Kerala was also denied Rs 12,500 crore under the head of loans.
In all, the state has fallen short of approximately Rs 24,000 crore in the ongoing financial year, finance minister K N Balagopal had said.
Additionally, the state's share from central taxes was reduced to 1.92% by the 15th finance commission, which was earlier 3.875% during the 10th finance commission. Kerala has sustained a loss of at least Rs 20,000 crore through this head, the finance minister had said.
Even when the government blames Centre for reduced revenue deficit grant, the state is the recipient of the largest share of revenue deficit grant as recommended by the 15th finance commission from 2020-21 to 2025-26.
Kerala was granted Rs 53,137 crore as revenue deficit grant, which is the highest compared to 16 other states which were given the grant. Also, the state has witnessed an 80% jump in its debt in the past five years and the rate of the state’s debt remained above 10% in these years.