THIRUVANANTHAPURAM: The Union government has no plans to relax the existing terms on net borrowing ceiling for state governments, including Kerala, the Lok Sabha was informed on Monday.
Kerala can avail of Rs 29,136.71 crore in market borrowings this year. Of this, consent has already been given to borrow Rs 23,852 crore, Union Finance Minister Nirmala Sitharaman told NK Premachandran during question hour.
EDITORIAL | Kerala borrowings cap: Tighten fiscal belt
The Kerala government has requested for an additional borrowing equivalent to 1% of Gross State Domestic Product (GSDP) over and above the borrowing ceiling fixed for 2023-24. However, the Union government applies a common yardstick while fixing the annual borrowing limit of all the state governments under Article 293(3) of the Constitution. In doing so, it is guided by the recommendations of the Finance Commission, she said.
The gross borrowing ceiling of Kerala for the year has been fixed at Rs 47,762.58 crore. Of this, Rs 29,136.71 crore is Open Market Borrowing (OMB) and the rest borrowing from other sources.
Kerala is also eligible for an additional borrowing of Rs 3,511 crore equivalent to the contribution made under the National Pension System. The state was allowed an additional borrowing of Rs 4,060 crore in 2021-22 and Rs 4,263 crore in 2022-23 for meeting certain performance criteria in the power sector, she said.
Rs 36,231 crore given to Kerala as revenue deficit grant: Sitharaman
A similar facility for additional borrowing for performance in the power sector is also available in 2023-24, Sitharaman said. An amount of Rs 36,231 crore was provided to Kerala as revenue deficit grant from 2021-22 to 2023-24, till November. Under the scheme for special assistance to states for capital expenditure, an interest free loan of Rs 2,141 crore was released to the state government during 2021-22 and 2022-23, she added.