THIRUVANANTHAPURAM : The government has planned to begin the assembly budget session on January 25 with the governor’s address. As per the current plan, the motion of thanks will be held on January 29, 30, 31 and February 1. The budget has been scheduled for February 2. The dates will be finalised in the cabinet meeting on January 10.
Meanwhile, the state’s financial crisis is set to worsen with the union government further slashing the limit on market borrowings. According to the state finance department, the Centre allowed borrowing of only Rs 1,838 crore for the last quarter of the fiscal against the state’s demand for Rs 7,437.61 crore.
According to the state finance department, the initial gross borrowing limit sanctioned for Kerala was Rs 45,689.61 crore. Of this, Rs 32,442 crore was acquired through open market borrowings. A total of Rs 14,400 crore was to be sourced from NABARD and NSSF. Until the third quarter ending December, Kerala made market borrowings worth `23,852 crore. The state expected a sanction for open market borrowings worth Rs 7,437.61 crore.
Sources in the finance department said the unexpected cut will put the state into deep trouble. Activities planned in the last quarter, including social security pension payments, will be affected, sources said. Social security pension payments and welfare fund board pensions have been pending since September.
The state government had recently approached the Supreme Court challenging the Centre’s unilateral decisions on slashing the state’s borrowing limit. The state’s major opposition is against the Centre’s decision to adjust off-budget borrowings from the state’s net borrowing ceiling on open market borrowings. The state government claims that there is a significant growth in the state’s tax revenue from the financial year 2020-21 onwards. However, factors such as the Centre’s failure to provide GST compensation and the reduction in revenue deficit grant have squeezed the state financially. We have tried to overcome this by increasing tax and non-tax revenue and prioritising expenditure, but the economic impact is more than we can bear.
In the petition, Kerala has sought an order from the apex court to settle centre-state disputes under Article 131 of the Constitution. The state’s other demands are to prevent unconstitutional interference by the centre in the state’s financial affairs, repealing unconstitutional cuts on the state’s borrowing limit, and revoke the centre’s order, which included the state’s public account liabilities in the borrowing limit.
Fin crisis to worsen