The Congress-led UDF government in Kerala has decided to raise ₹1,800 crore through open market borrowing within days of taking office.
The money will be used to meet monthly expenses such as salaries, pensions, welfare pension disbursals and newly announced schemes, which include free rides for women in state transport buses.
Chief minister V.D. Satheesan, who is in Delhi, is scheduled to meet Prime Minister Narendra Modi on Tuesday and is expected to seek special assistance from the Centre to tackle the severe fiscal crisis and implement his government’s ambitious welfare projects. The RBI will auction the first batch of government securities on May 26 through the e-Kuber portal.
The Centre has allowed Kerala to borrow ₹23,000 crore between April and December. Before the new government assumed power, the previous LDF government had already raised ₹2,800 crore through the open market route on May 12.
Committed expenditures consume approximately 69 per cent of the state’s total revenue receipts and leave very little to be channelled into development projects.
Economist K.J. Joseph, director of Gulati Institute of Finance and Taxation, told The Telegraph that the Satheesan government was facing a big challenge.
“But Satheesan, being the finance minister, knows how to address the shortfalls. The Kerala government has to focus mainly on the collection of the integrated GST levied on all inter-state supplies of goods and services. If we collect this tax properly, Kerala can easily generate ₹15,000 crore a year. Already, the state government has been providing ₹80 crore every month to the Kerala State Transport Corporation to meet the salaries of employees,” Joseph said.
He said clarity would emerge on how the government planned to go about providing free rides to women once the Kerala governor addresses the 16th session of the 140- member Assembly next week.
Joseph has recommended increasing the retirement age of state government employees from 56 years to 60 years, thereby saving ₹4,000 crore annually.
Satheesan was huddled with Congress president Mallikarjun Kharge, AICC general secretary (organisation) K.C. Venugopal and Gandhi family members in New Delhi on Saturday.
