Keralam CM urges Centre to exclude ₹5,580 cr land acquisition funds from borrowing limit; flags oil price
Thiruvananthapuram, May 26
Keralam Chief Minister VD Satheesan on Tuesday said that the state government has requested the Centre to exclude the ₹5,580 crore contributed for National Highway land acquisition from the state's borrowing limit.
Addressing a press conference, the Chief Minister highlighted the state's significant financial contribution to infrastructure and the resulting impact on its borrowing capacity.
"Keralam has contributed ₹5,580 crore towards land acquisition for the National Highway project, which has already been transferred to the NHAI. We have requested that this amount be excluded from the state's borrowing limit," the Chief Minister said.
Explaining the technicalities of the state's fiscal space, the CM noted that the actual available borrowing limit is tighter than it appears on paper.
"The state's borrowing ceiling is 3.5 per cent, of which 0.5 per cent is conditional and can be utilised only for the power sector. In reality, we effectively have only 3 per cent available. Even within that, liabilities created through KIIFB and the pension fund have significantly reduced the scope for fresh borrowing. We have communicated all these details to the Centre," he added.
The Chief Minister further stated that the government plans to provide a more comprehensive breakdown of the state's financial position soon.
"After releasing the White Paper, we will submit its detailed findings as well. The government will continue efforts to secure every rightful entitlement due to the state. We will work to obtain the maximum possible funds pending from the Central government across various departments, including the state's share in Centrally sponsored schemes, by removing legal and financial hurdles," Satheesan said.
Concluding his statement, the Chief Minister reiterated the government's commitment to the state's development. "The government will move forward with its efforts to build a new Kerala by ensuring maximum financial support for the state," he said.
Detailing the economic challenges, Satheesan pointed out that external factors and central policies are driving up inflation in the state.
"Since the Gulf War started for the last two months ago, it has affected our economy a lot. Secondly, the Government of India has increased oil prices four times. As a consumer state, that price hike will affect Kerala very badly. Because trucks are coming from distant places to Keralam, they have to consume more diesel at a higher price," Satheesan said.
He further noted that Kerala is currently facing high inflationary pressures. "Keralam itself is at an inflationary level number one in India, and the price rise is number one in India. Now, the price hike in the oil sector will put more inflationary pressure on the Keralam economy. The price rise may be high. We have presented this peculiar situation before the Government of India," he added.
— ANI
Reader Comments
Good move by CM, but I wish the state government had managed its finances better before. KIIFB loans and pension liabilities are eating up our borrowing capacity. We need a proper white paper on state finances, and fast. The oil price hike by Centre is going to hurt everyone, especially truckers and common citizens. Petrol already crossing ₹100 in many places!
I totally agree with the CM. Why should Keralam suffer because of Central government's oil price hikes? We are a consumer state with no oil production, and every price increase directly impacts our economy and people's pockets. Also, the White Paper on state finances is long overdue—transparency will help build trust. Hope the Centre listens! 🙏
While I understand the state's frustration, we must also acknowledge that the Centre has its own fiscal constraints. Maybe both sides need to sit together and find a middle ground. But yes, excluding highway acquisition funds makes sense—it's not a state expense but a national project. Otherwise, we're being punished for contributing to India's infrastructure!
I'm glad the CM is raising these issues. Keralam's inflation is already the highest in India, and this oil price hike will make things worse. But I also think the state government needs to reduce its dependence on borrowing and focus more on revenue generation. The white paper will hopefully show us where we stand financially. Let's hope for some relief from Delhi! 🤞
CM Satheesan has a point about the land acquisition funds. But why does Keralam always play the victim card? Every state
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