Kerala urges Centre to exclude ₹5,580 cr NH fund from borrowing limit

Kerala CM VD Satheesan has requested the Centre to exclude the ₹5,580 crore contributed for NH land acquisition from the state's borrowing limit, highlighting the state's tight fiscal space and rising inflationary pressures.

Keralam Chief Minister VD Satheesan on Tuesday said that the state government has requested the Centre to exclude the ₹5,580 crore contributed for National Highway land acquisition from the state's borrowing limit. Addressing a press conference, the Chief Minister highlighted the state's significant financial contribution to infrastructure and the resulting impact on its borrowing capacity.

"Keralam has contributed ₹5,580 crore towards land acquisition for the National Highway project, which has already been transferred to the NHAI. We have requested that this amount be excluded from the state's borrowing limit," the Chief Minister said.

State's Fiscal Constraints Explained

Explaining the technicalities of the state's fiscal space, the CM noted that the actual available borrowing limit is tighter than it appears on paper. "The state's borrowing ceiling is 3.5 per cent, of which 0.5 per cent is conditional and can be utilised only for the power sector. In reality, we effectively have only 3 per cent available. Even within that, liabilities created through KIIFB and the pension fund have significantly reduced the scope for fresh borrowing. We have communicated all these details to the Centre," he added.

The Chief Minister further stated that the government plans to provide a more comprehensive breakdown of the state's financial position soon. "After releasing the White Paper, we will submit its detailed findings as well. The government will continue efforts to secure every rightful entitlement due to the state. We will work to obtain the maximum possible funds pending from the Central government across various departments, including the state's share in Centrally sponsored schemes, by removing legal and financial hurdles," Satheesan said.

Concluding his statement, the Chief Minister reiterated the government's commitment to the state's development. "The government will move forward with its efforts to build a new Kerala by ensuring maximum financial support for the state," he said.

Economic Challenges and Inflationary Pressures

Detailing the economic challenges, Satheesan pointed out that external factors and central policies are driving up inflation in the state. "Since the Gulf War started for the last two months ago, it has affected our economy a lot. Secondly, the Government of India has increased oil prices four times. As a consumer state, that price hike will affect Kerala very badly. Because trucks are coming from distant places to Keralam, they have to consume more diesel at a higher price," Satheesan said.

He further noted that Kerala is currently facing high inflationary pressures. "Keralam itself is at an inflationary level number one in India, and the price rise is number one in India. Now, the price hike in the oil sector will put more inflationary pressure on the Keralam economy. The price rise may be high. We have presented this peculiar situation before the Government of India," he added.

(Except for the headline, this story has not been edited by Asianet Newsable English staff and is published from a syndicated feed.)