Kerala Borrows Money Under Center Rule Says State Finance Minister KN Balagopal

The minister defended his condition saying there were no “failures in the management of finances”.

Thiruvananthapuram (Kerala):

Kerala Finance Minister KN Balagopal has defended the state’s financial position saying it is not in trouble.

The minister asserted that the level of state debt in relation to its own GDP is below the authorized limit.

“We borrow money following the rule of the central government,” Balagopal said.

Notably, the Reserve Bank of India, in a report titled “State Finances: A Risk Analysis”, said that the fiscal position of states deteriorated sharply in 2020 with a sharp drop in income, an increase in expenditure and a sharp increase in debt to GDP ratios.

Based on the debt to GSDP ratio in 2020-21, the RBI found that the debt burden in 10 states including Kerala was quite high. These 10 states, according to the report, accounted for about half of the total expenditure of all state governments in India.

Kerala’s debt in the financial year 2021-22 was estimated at 37% and is expected to be 37.2% in the current financial year, according to the data.

“Additionally, the interest payment to revenue revenue ratio, a measure of the burden of debt service on state revenue, in 8 of these states was above 10%,” the RBI report said in a statement. July.

Mr Balagopal, however, defended his condition saying there was no “failure in the management of finances”.

In addition, he complained that the Center had taken over the power of the states to collect taxes.

“Under the GST, the central government took all the powers to collect taxes from the state governments and also decreased the share of the states. The state lost a minimum of Rs 12,000 crore,” said the minister.

“In my opinion, the ruling party and the opposition party should unite above politics to launch a protest against the central government to change the financial policy of the central government,” the minister said at the time. State Assembly.

(Except for the title, this story has not been edited by NDTV staff and is published from a syndicated feed.)

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