Kerala fiscal report: UDF may release white paper on state’s mounting debt
THIRUVANANTHAPURAM: The United Democratic Front (UDF) is moving to prepare a comprehensive White Paper detailing the current financial status of Kerala. The objective is to highlight the "dire" state of the economy following ten years of Left Democratic Front (LDF) rule and present these findings to the public.
This move mirrors a strategy used in 2016 when the first Pinarayi Vijayan government, upon assuming power, released a White Paper on the alleged financial mismanagement of the preceding Oommen Chandy administration. The UDF’s proposed document aims to catalogue the current government’s spending patterns, the surge in debt liabilities, and the mounting arrears.
Financial hurdles for the incoming government
Projections suggest that a UDF government—theoretically assuming power with 102 seats—would inherit a massive financial burden. Funding the proposed "Five-Point Indira Guarantee" will be a significant challenge:
- Public Transport: Providing free travel for women in KSRTC buses is estimated to cost ₹3 crore daily.
- Education & Welfare: Monthly assistance of ₹1,000 for female undergraduate students, subsidised food outlets, and increased welfare fund contributions.
- Public Sector Obligations: The government will face immediate pressure regarding salary revisions for state employees and wage hikes for ASHA workers.
Diminishing central support
The report indicates that additional financial assistance from the Central Government is unlikely. Even securing the state’s mandatory share will require significant pressure on the Union Ministry.
- Borrowing Limits: For the current financial year, the Centre has authorised a borrowing limit of approximately ₹23,000 crore up to December—a reduction of ₹6,500 crore compared to the previous year.
- Special Grants: While the second Pinarayi government received a special grant of approximately ₹37,000 crore, the current Finance Commission has made no such recommendations for the upcoming period.
- Exhausted Funds: The caretaker government has reportedly already utilised ₹4,700 crore of this year's borrowing limit, leaving only ₹18,300 crore available until December. Reports suggest the state treasury currently has no significant reserves.