Kerala Chief Minister Pinarayi Vijayan recently communicated with Union Finance Minister Nirmala Sitharaman, stating that the Centre’s fiscal policies are posing a threat to the State’s development initiatives and its social security framework. Mr. Vijayan estimated a revenue loss for Kerala at ₹9,765 crore due to the Centre’s approach and highlighted a ₹5,200 crore reduction in the State’s borrowing limit. He asserted that Kerala had not demonstrated financial indiscipline to justify such measures, attributing them to decisions made outside the State’s fiscal and administrative jurisdiction.
In response, the Chief Minister made several demands. He requested the immediate restoration of Kerala’s borrowing limit as an interim relief, the repayment of ₹965 crore collected as IGST recovery, and the deferment of any decision to further reduce Kerala’s borrowing limit until the next financial commission is established. Additionally, Mr. Vijayan sought permission for Kerala to immediately borrow ₹6,000 crore to meet its commitment to the Union Ministry of Transport for national highway land acquisition costs. He emphasized that these requests were not for special concessions but were essential for the State’s fiscal stability, ongoing development, and the protection of its social security net.
Source: https://www.thehindu.com/news/national/kerala/kerala-cm-tells-centre-its-fiscal-policies-imperil-states-development-and-social-progress/article70147576.ece