THIRUVANANTHAPURAM: In what could cast a shadow over Onam for many, the state government has taken the extreme measure of lowering the upper limit on treasury payments to just Rs 5 lakh. This move represents one of the most stringent restrictions on treasury transactions observed recently and underscores the escalating financial challenges confronting the state. As a result, any payments surpassing this threshold will now require ways and means of clearance or prior approval from the finance department.
The restriction has been prompted by a profound scarcity of funds, exacerbated by substantial expenditures during the festive season. The finance department has reportedly communicated the new curbs to the treasury department. The development marks a departure from the earlier upper limit of Rs 10 lakh, which had been implemented towards the end of July to ensure adequate funds for various expenses during the Onam season.
Meanwhile, certain previously imposed curbs remain in place. Notably, electricity, water, fuel, and telephone charges are capped at Rs 25 crore. For fixed deposit withdrawals by institutions, the ceiling is set at Rs 10 crore. Since April 2022, GST refunds, land acquisition compensation, and any payments to end beneficiaries are limited to Rs 25 lakh each.
Pensions, salary exempted from ceilings
Expenditures such as salary disbursements, pensions, and medical expenses have been excluded from these ceilings. In a bid to prevent circumvention of the limits through bill bifurcation, the Finance Department has cautioned all departments against such practices. Treasuries have been instructed to be vigilant in monitoring for this tactic. Finance Minister K N Balagopal had previously disclosed that the government had already disbursed Rs 19,000 crore for various Onam-related expenses in August. In a bid to address the fiscal challenges, the government recently decided to raise Rs 2,000 crore through market borrowing.