Indications are that the State government will be forced to keep a tighter rein on finances in the post-Onam days. Given the spurt in spending during the festival season, the government is reportedly staring at an overdraft situation, although Finance department sources rule out the possibility of a crisis.
Onam-time expenditure, including usual expenses on salary and pension, is likely to touch ₹15,000 crore. The distribution of free Onam food kits to ration card holders was projected to cost the government ₹425 crore this year. The government also disbursed social welfare pension of ₹3,200 each to 60 lakh beneficiaries during Onam, while announcing a bonus of ₹4,000 each for government employees, and special festival allowance of ₹2,750 for employees who are not entitled to a bonus. The government also disbursed approximately ₹295 crore to the ailing Kerala State Road Transport Corporation (KSRTC).
According to the Finance department, the State is likely to be deprived of about ₹ 23,000 crore in 2022-23 — including a ₹12,000-crore cut due to the discontinuation of Goods and Services Tax compensation — owing to unfavourable Central policies. This fiscal, Kerala also faces a reduction of ₹3,578 crore in its borrowing limit due to Centre’s insistence on viewing Kerala Infrastructure Investment Fund Board (KIIFB) and Kerala Social Security Pension Limited (KSSPL) borrowings as part of State debt.
Cancelling promotions
The Centre had in July pegged Kerala's borrowing limit at ₹ 17,936 crore for the nine-month period from April to December. Earlier this month, the Finance department had directed departments to cancel promotions given in violation of a November 5, 2020, order on economy measures for tackling the COVID 19-induced strain on finances. The Finance department also wanted departments to recover additional benefits allocated by way of these promotions. Through this order, the government had put a stop to the system of filling posts through promotions if an officer went on leave for more than three months.