Balagopal meets Nirmala Sitharaman, seeks Rs 24k crore special package

“The state is losing about Rs 4,710 crore each in this financial year and the next. This is due to the introduction of a new measure by the Union government," the memorandum said.
Union Finance Minister Nirmala Sitharaman with Kerala Finance Minister K N Balagopal during a meeting in New Delhi on Thursday
Union Finance Minister Nirmala Sitharaman with Kerala Finance Minister K N Balagopal during a meeting in New Delhi on Thursday Photo | PTI

KOCHI: Finance Minister K N Balagopal on Thursday met Union Finance Minister Nirmala Sitharaman in Delhi and submitted a detailed memorandum of demands which included the withdrawal of the imposition of retrospective effect in the borrowing ceiling, treating the funds incurred for land acquisition for National Highways as additional capital expenditure, and a special Rs 24,000 crore special package for the state. Further, the Kerala government also demanded special assistance from the centre for the Vizhinjam International Seaport Ltd (VISL).

Borrowing ceiling

“The state is losing about Rs 4,710 crore each in this financial year and the next. This is due to the introduction of a new measure by the Union government, in retrospective effect, to cut the borrowing limit of the state for borrowings of KIIFB and Pension Company done in the 2021-22 financial year. Hence, permission may be granted to borrow Rs 4,710 crore each during the current financial year and the next financial year over and above the borrowing ceiling being fixed for the two years,” the memorandum said.

NH land acquisition

The memorandum said Kerala may perhaps be the lone state that spent 25% of the land acquisition (LA) cost of NH widening. The approved amount for this purpose is Rs 6,769 crore, and the state has already spent Rs 5,580 crore through KIIFB. This amount has been calculated for cutting from annual borrowing limits, and therefore, becomes a disincentive to the state for supporting large capital projects.

“Hence, we request that this amount be treated as additional capital expenditure for National Highways and hence state should be allowed to borrow Rs 6,000 crore in this financial year itself without any conditions,” it said.

Special package for Kerala

The memorandum also requested a special package of at least Rs 24,000 crore for Kerala in the union budget 2024-25 to tide over the current liquidity stress by scheduling it over a period of two years from 2024-25.

Special aid for Vizhinjam International Seaport

The state government also sought a special capital investment support of Rs 5,000 crore to fulfil the obligations in developing the Vizhinjam port region. “We also request another Rs 5,000 crore to finance certain other infrastructure projects, such as the ‘Tunnel Road link between Kozhikode and Wayanad’.

Dues from union government

The memorandum pointed out that Kerala did not receive any releases from the provision of Rs 586.95 crore under the 15th FC Health Sector grant for local governments in 2023-24.

“No instalments have been released from the current year’s provision of Rs 616.28 crore as well,” it said.

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