Central Government Cuts Kerala’s Borrowing Limit, Impact on Welfare and Development

Thiruvananthapuram: The central government is once again taking steps aimed at undermining the financial foundation of Kerala. In the last quarter of this financial year, the central government has further reduced Kerala’s borrowing limit.

The cut amounts to 5,944 crore rupees. As a result, instead of being allowed to borrow 12,516 crore rupees, Kerala can now raise only 6,572 crore rupees.

The central government has justified this move with the argument that loans taken by KIFBI and pension companies should be included within the state’s overall borrowing limit.

Earlier, Chief Minister Pinarayi Vijayan had requested the Prime Minister during a meeting to relax the restrictions on Kerala’s borrowing limit. However, the central government has implemented this new cut despite rejecting these requests.

This deliberate move to create a financial crisis comes at a time when the state is entering an election year and expects significant public spending.

It is evident that the political aim behind this is to disrupt welfare activities and development projects. Considering the interim budget and the upcoming elections, the BJP government is attempting to push the state into a financial crisis.

An official letter regarding the reduction in the borrowing limit has been sent by the central government to the state finance department.