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Attributing Kerala’s financial woes to “external factors”, especially the limits on borrowing imposed by the Union government and non-releasing of thousands of crores of funds due to it, Finance Minister K.N. Balagopal on Tuesday said the current crisis that the State was facing was unprecedented.
He accused the Opposition United Democratic Front (UDF) of failing to question the Union government’s stance against the State, even as there was Opposition unity on such issues at the national level.
He said there had been a reduction of ₹6,716 crore in revenue deficit grant from the Centre compared to the previous year. The State’s borrowing limit had been reduced by ₹24,638.66 crore this year. Kerala stood to lose at least ₹9,000 crore in the current year as the Union government had not taken a favourable decision on the demand from the States to continue the compensation for implementing Goods and Services Tax. However, despite these reasons, it was not practical to cut down on the government’s spending, which has led to the current crisis, he said.
Mr. Balagopal said the government was working with a clear roadmap to address these issues. The State’s revenue had increased by as much as ₹11,000 crore in the previous year. Kerala was also the only State to implement salary revision for employees during the COVID-19 pandemic period. He reiterated that Plan spending would not be affected in any manner in the remaining months of the current financial year.
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