The adverse impact of demonetization is staring at Kerala as the government scramble to disburse salaries and payments for the month of November. The state needs currency to the tune of Rs.1200 crores to overcome the impending crisis. But as the full impact of the demonetization on state revenue comes into play in the coming weeks, Finance Minister Thomas Isaac stated that he had no clue on how to meet the salary needs post-December. 

 

The government will ensure that the salaries and pensions for this month are remitted to the bank accounts of the beneficiaries. But employees may not be able to withdraw money due to currency crunch, Isaac said. 

 

The state government had written to Finance Minister Arun Jaitley and Reserve Bank of India demanding Rs.1,000 crores in currency. But the Centre did not respond positively. 

 

The state revenue is predicted to dip in December, and the government is concerned about how to disburse salary in the coming month, Isaac said. 

 

Meanwhile, the state government decided to declare a moratorium on the repayment of agriculture loans from cooperative banks in the state. The demonetization and the norms laid down by the Reserve Bank have brought the functioning of the cooperative banks to a freeze.