Kerala is set to raise another ₹1,800 crore through an RBI bond auction after Onam. Here’s what is known about the state’s fresh borrowing plan and its significance for Kerala’s finances.
The Kerala government is experiencing increasing financial pressure as it goes through the first few months of the financial year. The state has borrowed almost half of the borrowing limit set in its budget and has recorded almost half of the budgeted revenue deficit.
Even in such a scenario, the government has decided to borrow an additional ₹1,800 crore due to its high expenditure during the Onam season. The auction for government securities is expected to take place on Tuesday through the online portal of the Reserve Bank of India.
Almost Half Of Borrowing Limit Borrowed
As per the budget of the current fiscal year of Kerala, the state was supposed to borrow ₹56,413.06 crore from the open market. But, within the first four months, the state has borrowed ₹26,461.75 crore.
Related Articles
This figure accounts for 46.91% of the total amount that the state intended to borrow. The additional ₹1,800 crore will be borrowed on top of the amount which has been borrowed.
Government Expenditure During Onam Season Touches ₹10,000 Crore
There has been a large-scale expenditure by the government during Onam. About ₹10,000 crore was the total expenditure made towards welfare pensions, bonuses, festival allowances, and various other measures to help the market.
This expenditure was done while the state had borrowed ₹2,200 crore just last month. The motive behind such a huge expenditure from the government was to provide cash flow into the market during the festive season. It was believed that such an expenditure will lead to a high amount of tax collection and ultimately bring in revenues into the treasury.
Kerala's GST Revenue ₹13,880.82 Crore So Far
In the first four months of the financial year, Kerala collected GST of ₹13,880.82 crore.
Now there is hope in the finance department that the increased economic activity generated by the expenditures during the Onam will also bring about increased tax collections in the coming period. Increased consumer spending during the festive season will help in collecting GST revenue.
A further ₹1,800 crore has been borrowed recently and the financial situation of the state remains under pressure due to such large expenditure.
