The Kerala government will take up the matter of its reduced open market borrowing (OMB) limits with the Centre, Finance Minister K. N. Balagopal indicated on Tuesday, saying the State needs clarity on its borrowing space for the fiscal.
The contentious Central government decision setting the OMB at ₹15,390 crore (including ₹2,000 crore allowed in April) was discussed at a high-level meeting attended by Chief Minister Pinarayi Vijayan, Mr. Balagopal, Chief Secretary V. P. Joy and senior government officials on Tuesday.
Later, Mr. Balagopal told a press conference that the State needed a clarification on the Central government decision and and a detailed borrowing plan for the fiscal. The May 26 letter from the Centre on the OMB limit lacks clarity. Neither is it accompanied by a detailed statement showing the break-up for the first nine months (April-December) and for the entire fiscal which was provided in 2022-23, he said.
Mr. Balagopal read out a portion of the letter which said, ‘‘It has been decided by the competent authority in Government of India to accord consent to the State Government of Kerala under Article 293 (3) of Constitution of India to raise OMB ₹13,390 crore under proposed borrowing programme of the State for the year 2023-24.’‘ (The borrowing of ₹2,000 crore permitted at the start of the financial year would be added to this amount, taking it to ₹15,390 crore.)
The Centre has not provided any reason for its decision. The Kerala government is also not clear whether further permissions for borrowing can be expected, Mr. Balagopal said. ‘‘For the 2022-23 fiscal, we were provided a detailed table explaining that the space for OMB would be ₹23,915 crore and that the borrowing space for the first nine months would be ₹17,936.66 crore. This time, no such details have been provided,’‘ he pointed out.
Mr. Balagopal contended that the borrowing limit set by the Centre is way lower compared to the calculations made by the State government, the reason for the State’s charge that the limit has been slashed arbitrarily. For the entire fiscal, the State is eligible to borrow ₹32,442 crore (3% of the GSDP).
‘‘No one can complain if we feel that the State is being financially choked ahead of the Lok Sabha elections. They are arbitrarily reducing our borrowing space even within the 3% limit,’‘ Mr. Balagopal alleged.
Mr. Balagopal also refuted the Minister of State for External Affairs V. Muraleedharan’s contention that the State had been permitted its eligible borrowing limit. Neither the State government nor the Finance Secretary is aware of the statistics on the limit presented by the Union Minister on Monday, Mr. Balagopal said, terming them misleading.
Political remarks made in a public meeting and commenting on administrative matters are two different things. The Union Minister should have refrained from making such statements keeping in mind administrative prudence and constitutional responsibility, Mr. Balagopal said.
