The has decided to raise Rs 1,500 crore from the market as Kerala continues to be in a financial crisis.
The government decided to raise the amount and use it for developmental activities in state. However, it is also learnt that the funds are meant for the disbursal of salaries and pensions next month.
The states main committed expenditure include salaries, pensions and interest payments on loans and the revision of salaries and pensions based on the recommendations of the 11thpay commission alone has caused an additional burden of Rs 15,000 crore annually to the exchequer.
Additionally, the state’s share from central taxes was reduced to 1.92% by the 15th Finance Commission, which was earlier 3.875% during the 10th finance commission. Kerala has sustained a loss of at least Rs 20,000 crore through this head, the finance minister had said.
Even when the government blames Centre for reduced Revenue Deficit grant, the state is the recipient of the largest share of revenue deficit grant as recommended by the 15th finance commission from 2020-21 to 2025-26.