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The Kerala government raised Rs 7,139 crore from the market after receiving approval for additional borrowing from the Union government.
Thiruvananthapuram: The Kerala government secured Rs 7,139 crore from the market on Tuesday, providing relief amid an impending financial strain. This fundraising was made possible after the Union government approved additional borrowing on Monday evening. The state raised the amount by auctioning state government securities (SGS) with varying maturity periods.
According to the Reserve Bank of India (RBI) website, Kerala obtained Rs 990 crore through SGS-40 (maturing in 2040), Rs 3,000 crore via SGS-43, and Rs 3,149 crore through the auction of SGS-55 securities.
Kerala over-borrowing in recent years, Modi govt informs Supreme Court
Faced with a delay in the Union Government’s approval for additional borrowing, the Kerala government was preparing to implement treasury controls.
However, after receiving the Centre’s nod, the state successfully raised Rs 7,139 crore through the auction of state government securities (SGS) with varying maturity periods.
Kerala had anticipated the approval, considering its eligibility for additional borrowing. As part of power sector reforms, the Centre typically allows states to borrow an extra 0.5% of their Gross State Domestic Product (GSDP).
The office of Union Finance Minister Nirmala Sitharaman informed the Resident Commissioner of Kerala in Delhi on Monday evening about the approval for additional borrowing, enabling the state to secure funds without delay.
Kerala over-borrowing in recent years, Modi govt informs Supreme Court
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