State to seek Centre’s intervention to help tide over fund crunch

The cut on borrowings came at the fag end of the fiscal when the state has to honour huge amounts under plan and non-plan heads.

Published: 19th February 2019 02:58 AM  |   Last Updated: 19th February 2019 05:55 AM   |  A+A-

By Express News Service

THIRUVANANTHAPURAM: The Kerala Government will seek the immediate intervention of the Centre to help the state tide over the fund shortage. The state government attributes the shortage of funds to the Centre’s decision to slash the state’s borrowing capacity by around `1,800 crore in the last quarter of the fiscal. The reason cited for the cut was the huge deposits in the state treasury.

The cut on borrowings came at the fag end of the fiscal when the state has to honour huge amounts under plan and non-plan heads. This has forced the government to put in place restrictions on the flow of treasury funds. The Finance Department has directed the Treasury Department that only up to `5 lakh should be allowed to be withdrawn under plan and non-plan heads. Bills above `5 lakh can be passed through ways and means clearance.

Contractors who submit bills of public work are given tokens and the payment will be on a first-come-first-serve basis and also based on the liquidity position of the government.The Finance Minister’s Office said the government has facilitated a discounting facility for the contractors. “Either they can approach banks or the Kerala Financial Corporation (KFC) for the discounting facility. The KFC is also providing advance payment to contractors for new work,” officers said.

There is no restriction on the payment of scholarships, hospital bills, dietary and medicine charges. The Finance Minister’s  Office stated the fund crunch will not affect the social security pension distribution. The newly formed Kerala Social Security Pension Ltd will collect deposits from the consortium of the primary agricultural credit cooperative societies to provide pension to 44.27 lakh beneficiaries.

The government is making advance payment of the social security and welfare fund board pensions in March. The payment will include the pension for five months - from December 2018 to  April 2019. Of this, the amount for April will be given as per the increase announced in the budget. The government will incur an expense of `2,980.68 crore for the total payment.

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