THIRUVANANTHAPURAM: Financial crisis has forced the state government to impose additional restrictions on payments from state treasuries, specifically on the withdrawal of deposits by government and public sector enterprises.
Now, the cap on daily withdrawals has been reduced from Rs 25 crore to Rs 10 crore. Several welfare fund boards and institutions like the Kerala State Financial Enterprises and the Kerala State Beverages Corporation have huge deposits in the treasuries. As per the treasuries department, the restriction is a temporary arrangement for liquidity management.
The state government has been facing financial stress ever since the union government tightened the norms on market borrowings a few years ago. The government had struggled to source money to meet Onam festival expenses and had imposed restrictions on treasury payments ahead of the festival season.
At present, treasuries have a standing instruction not to clear bills above Rs 5 lakh without the nod of the finance department. The department’s Ways and Means wings has to clear such bills. The norm applied to local self-governments and payments to government contractors.
Earlier, the government had toughened its stand on funding to grant-in-aid institutions. For some years now, the government had been asking these organisations to become self-reliant financially. In the latest order, the government categorically said it will not shoulder salary or pension liabilities of the organisations. The order also warned of action against heads of institutions that move court against the government.