THIRUVANANTHAPURAM: In response to the reduction in borrowing limit imposed by the Centre, the state government has decided to prioritise spending and rationalise expenditure. Chief Minister Pinarayi Vijayan chaired a high-level meeting on Tuesday to review the state’s major programmes and financial position.
Additional Chief Secretary (Finance) Bishwanath Sinha presented a report highlighting the need to rationalise expenditure, and the CM instructed officials to prioritise benefits for common people. Emphasis was placed on social security pension payments and the health sector, and officials were advised to exercise prudent spending to make up for the shortfall.
The meeting also aimed to ensure the smooth functioning of the government and the implementation of development and welfare activities during the CM’s upcoming foreign trip, as well as in the absence of top bureaucrats.
However, the state government has not received a response from the Central Department of Expenditure regarding the reasons for the cut in the net borrowing ceiling (NBC) on open market borrowings (OMBs). This year, the state’s NBC for the first nine months was set at Rs 15,390 crore, compared to the previous year’s cap of Rs 23,915 crore.
Finance Minister K N Balagopal had stated earlier that the Centre did not provide the calculation sheet along with the sanction letter on NBC. Last year’s sanction letter included a calculation sheet listing the reasons for the reduction, which primarily involved off-budget borrowings.
While the state government is unaware of the exact NBC for the entire fiscal year, Union Minister V Muraleedharan previously stated that the figure was Rs 20,521 crore.
According to Balagopal, Kerala received sanction for OMBs amounting to Rs 23,915 crore for the first nine months of the fiscal year 2022-23, along with Rs 912 crore for the last quarter. However, this year the state was expecting sanction for approximately Rs 20,000 crore for the first nine months. The state’s finance secretary recently wrote to their central counterpart, requesting the calculation sheet to understand the reasons for the reduction.
It is believed that off-budget borrowings by the Kerala Infrastructure Investment Fund Board and the Kerala Social Security Pension Limited are the factors contributing to the cut in the borrowing limit.