THIRUVANANTHAPURAM: Finance Minister K N Balagopal met Union Finance Minister Nirmala Sitharaman in New Delhi on Monday seeking permission to borrow an additional Rs 6,000 crore this financial year and restore the amounts that were deducted on various counts in a bid to reduce the strain on fiscal health of the state and to meet expenditures related to Onam season.
Highlighting the challenges being faced by the state in meeting its expenditure commitments due to shrinking fiscal space, Balagopal urged the Union minister to allow the state to borrow Rs 6,000 crore in the current financial year without any conditions, over and above the net borrowing ceiling fixed by the centre.
Balagopal also brought to her attention that 25% of land acquisition cost of National Highway widening was met through borrowing. However, it was deducted from the annual borrowing limit of the state.
This is against the Union government’s policy of encouraging capital expenditure by the states as capital expenditure should be encouraged for India to get out of the middle-income trap, he told the Union minister.
Balagopal also sought release of Rs 1,877 crore that was allowed for the state in 2023-24 on account of variation in the Gross State Domestic Product, which was adjusted in 2024-25.
He also wanted the Centre to restore Rs 3,323 crore that was deducted from the state’s borrowing limit for a shortfall in Guarantee Redemption Fund (GRF) contribution. He said the state has already constituted GRF and contributions at one percent for next five years are slated to commence within the current quarter of the fiscal year itself.
Balagopal also drew the minister’s attention to deduction of another Rs 965 crore from Integrated Goods and Services Tax and sought its restoration.