CPI(M) state secretariat said BJP-led Centre is torpedoing Kerala's development initiatives, interfering in its financial matters.
KN Balagopal. (Wikimedia)
Following the Union government halving Kerala’s borrowing limit, leaders of the ruling CPI(M) — including Chief Minister Pinarayi Vijayan — have criticised the decision saying it was an “attempt to suffocate the state” financially by any means necessary.
The CPI(M) state secretariat said the BJP-led Centre has been torpedoing Kerala’s development initiatives by interfering in its financial matters.
The secretariat also urged civil society organisations to protest against the “fiscal ban” imposed on Kerala.
The Left party on Saturday, 27 May, said the Union government had earlier permitted to borrow ₹32,442 crore — three percent of the GSDP. But the limit has now been reduced to ₹15,390 crore.
Kerala Finance Minister KN Balagopal had on Friday, 26 May, said the central government has put the borrowing limit to ₹15,390 crore, which is half of what Kerala is entitled to borrow.
“The Union government does not even accept the legislation on fiscal responsibilities. They have not yet revealed the reason behind the slashing of the borrowing limit,” the statement said.
Kerala Chief Minister Pinarayi Vijayan, on Sunday, 28 May, lashed out at the BJP-ruled central government over its decision to cut down the borrowing limit of the state by half by terming the move as “sadistic”.
Vijayan said that the central government jumps at every opportunity to fill its coffers. Like implementing GST, it was taking a “negative approach” when it came to helping the state progress.
“This is not just a problem of the LDF government. It is a problem for the whole state. It is a matter of the progress of the people. ‘Should the Union government take the position of letting a state perish’ is an issue to be considered,” he said.
The state government had requested the Centre to fix the borrowing limit at ₹22,000 crore. Balagopal said the Centre was attempting to strangle the state financially, and in the process, the less privileged in the state were getting targeted.
Balagopal called for a joint effort by all political parties in Kerala to secure its legitimate dues. The state government urgently requires at least ₹20,000 crore to clear the arrears in top priority areas.
Meanwhile, BJP state leaders hinted that the Centre started regulating the open-market borrowings after the state government excluded the borrowings by the Kerala Infrastructure Investment Fund Board (KIIFB) and Kerala State Social Security Pension Ltd (KSSPL) from the state’s direct debt.
The state government used both agencies to avail loans indiscriminately and beyond the permitted levels, the BJP leaders alleged.
“There is nothing strange in the decision of the Union government. KIIFB and KSSPL must not act as independent entities. The Centre wanted both of them to be accountable and adjust their borrowings within the limits set for Kerala. No politics is involved in it,” BJP state president K Surendran told South First.
Faced with a financial crunch, the state government is going slow in implementing projects requiring huge expenses.
It even shelved the launching of welfare measures marking the second anniversary of the Pinarayi Vijayan-led LDF government. Since the beginning of this fiscal year, social security pensions, including those for widows and aged, ailing people, have been put on hold.
The Centre is enforcing the cut on borrowing. While the government plans to avail loans and release the pending amounts, at least partially.
Balagopal said the government’s promise to disburse the welfare pension every month could not be honoured because of the financial crisis created by the Centre.
He also said there would be delays in releasing salaries and perks to state employees if the crisis continues without the Centre initiating mitigatory steps.
The finance minister said the state government, on its part, managed to improve the financial situation by bringing down expenditures to the barest minimum. He said the Centre lowering the state’s borrowing limits is not a healthy practice.
The NDA government at the Centre has refused to honour the Constitution or democratic values, it said.
“The state government has been implementing welfare measures for the people of Kerala. Despite the financial crunches caused due to the policies of the Union government. They wanted to hamper the development and growth of the state,” the ruling party said.
(With PTI inputs)
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