'Financial mismanagement and luxury...' MoS V Muraleedharan explains reasons for financial crisis in Kerala

Thiruvananthapuram: Union Minister of State for External Affairs V Muraleedharan refuted the Left-led Kerala government's claims that it had decreased the state's borrowing capacity, and instead blamed the state's indebtedness on the LDF administration's "financial mismanagement and luxury."

He asserted that the state's financial crisis and high debt were the product of the LDF government's "financial mismanagement and extravagance."

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Muraleedharan termed as an "extravagance" the honorarium approved for expelled Congress leader K V Thomas, now appointed as the state's representative in New Delhi, and the foreign trips of Kerala Chief Minister Pinarayi Vijayan and the state's ministers.

The minister added that the Centre had imposed curbs on state borrowing because it did not want a situation like that in some of India's neighbouring countries, which were in terrible economic problems as a result of their financial policies.

"So I would like to ask the state finance minister and the chief minister not to foist the blame for it on the central government," Muraleedharan told reporters at a press conference held by him in Thiruvananthapuram.

The Union minister remarked that he was unsure if Chief Minister Vijayan and State Finance Minister K N Balagopal were accusing the Centre of being to blame "because they lacked information about such topics" or if it was a "deliberate and conscious" effort to mislead the public.

The Chief Minister attacked the BJP-led central government on Sunday, calling its alleged action to cut Kerala's borrowing capacity in half "sadistic," while Balagopal had called it "part of the union government's political vendetta."

Refuting the allegations of the LDF government, Muraleedharan cited figures of the borrowings allowed for the state and how much of it has allegedly already been availed of by Kerala.

The union minister said that for the financial year 2023-24, Kerala was allowed to borrow Rs 32,442 crore as 3 per cent of its Gross State Domestic Product (GSDP) in accordance with the recommendations of the 15th Finance Commission.

Additionally, it was also permitted Rs 20,985 crore under replacement borrowing and besides that, Rs 1,755 crore was sanctioned for the state as central contribution under the National Pension Scheme, he said.

"In total Rs 55,182 crore is allowed to be borrowed in this financial year and out of that Rs 34,661 crore has already been taken by the state till now. Of the remaining Rs 20,521 crore, the Centre sanctioned Rs 15,390 crore for the first nine months.

"The balance Rs 5,131 crore would be given towards the end of the financial year," the minister said.

He said if the amount for the last quarter was denied by the Centre, then there may be some weight in the claims by Balagopal, but the Union government has not said anything like that.

"So where is the reduction? Therefore, there is no question of political vendetta. Either the state Finance Minister and Chief Minister have no clue about how these figures were arrived at or they are deliberately and consciously trying to mislead the public," Muraleedharan contended.

He also claimed that according to a recent RBI report, Kerala was one of the five states in the country with the highest debts and asked why the state required so much money.

"Is it to pay honorarium to people like K V Thomas, who probably already gets pension for being a former teacher and a former MP? Is it for foreign trips of the CM and the ministers? 

"This kind of extravagance cannot be permitted by the Centre as otherwise we might end up in the same financial situation as some of our neighbouring countries. That is the reason for the restrictions on borrowing by states," Muraleedharan said.  

The CPI(M)-led LDF government in Kerala last week approved an honorarium of Rs one lakh per month for its Cabinet rank special representative, expelled Congress leader K V Thomas, in New Delhi.

Also read: Cutting down Kerala's borrowing limit: CPI(M) says Centre trying to suffocate state with 'fiscal ban'

(With inputs from PTI)