Kerala government caps treasury payments following shortage of funds

Due to lack of funds, Keralait is Finance The department has capped Treasury payments in the first month of the new fiscal year.

In its directive to treasures Director, the Department has requested the reduction of the Ways and Means limit from Rs 1 crore to Rs 25 lakhs with immediate effect.

If there was a requirement for payments to be made above Rs 25 lakhs, special penalties will have to come into effect.

Until April 25, Treasuries were allowed to pay bills up to Rs 1 crore.

According to informed sources, the decision comes as the Kerala government is on a borrowing spree and has finished paying the salaries and pension of state government employees, in addition to paying interest. on previous loans.

Kerala appears to have gone bankrupt due to a delay in raising funds, they added.

If the borrowed funds do not return on time or if the GST compensation to the State does not arrive from the Center on time, then salaries and pensions due the first week of May may not arrive.

When the economist became Minister of Finance, Thomas Isaac was at the helm during the first Pinarayi Vijayan government (2016-21), he ably managed the poor state of finances through proper budget management and now with the first legislator KNBalagopal as Minister of Finance, things look a bit difficult.

Incidentally, Kerala’s total outstanding public debt skyrocketed after the Vijayan takeover and it now stands above Rs 3 lakh crores.

Outstanding debt is the total sum of public debt which consists of internal debt, loans and advances from the Center in addition to loans from financial institutions such as LICA and special securities and not to mention borrowings from deposits in the State PF, Treasury, pension funds and insurance. .

To get a clearer picture of debt, it is best to highlight it as a ratio of the size of the state’s economy to the state’s gross domestic product (GSDP).

A comparison of the national picture of states and union territories with the highest GSDP debt ratio in 2022 is Arunachal Pradesh 57.4%, Jammu and Kashmir Kashmir 56.6% , Punjab 53.3%, Nagaland 44.2%, Himachal Pradesh 43.4%, Rajasthan 39.8%, Meghalaya 39.2%, West Bengal 38.8%, Kerala 38.3% and Andhra Pradesh 37.6 percent.

One thing that should be noted is that the current staggering figure of Kerala’s outstanding debt has not happened overnight and successive state governments can, to some extent, take credit for themselves. deserves state achievements in education and health, which leads the rest of the country and to get here, investments are needed, but on closer inspection, experts have revealed the situation real.


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