THIRUVANANTHAPURAM: The influx of tax revenue has offered a temporary relief for the cash-strapped state government, as revenue collection deposits have enabled the state treasury to emerge from overdraft status. Prior to this development, the treasury had been operating under overdraft conditions for almost a week.
Despite moving out of overdraft, the treasury is still facing a deficit. As a result, certain restrictions remain in place to limit the outflow of funds. Notably, cheques and bills above Rs 5 lakh require ways and means clearance or prior sanction from the finance department.
The crisis is expected to alleviate only upon receiving the central government’s approval for open market borrowings. Typically, the Centre grants borrowing sanction for the first nine months of a financial year in May. Previously, the state had requested ad hoc sanction for borrowings amounting to Rs 5,000 crore. But the state was only sanctioned Rs 3,000 crore, which has been utilized. The gross borrowing limit for the current fiscal year stands at Rs 37,500 crore for the state.