Kerala CM urges Centre to increase State's borrowing limit from 3 pc to 5 pc

Kerala Chief Minister Pinarayi Vijayan on Friday reiterated its demand to increase the State's borrowing limit from the current 3 per cent to 5 per cent.

"Due to lockdown, there has been a drastic fall in revenue collection. To overcome the financial constraints, we need a hike in the borrowing limit. The Centre recently increased its borrowing limit to 5.5 per cent but the state's limit is still at 3 per cent. Despite repeated requests, the Centre has not bothered to increase the borrowing limit. It is not in line with the basic principles of a federal system," Vijayan said during a press conference.He said that there is nothing new in the announcement of Union Finance Minister Nirmala Sitharaman's allocation of more money to the States for the welfare of workers working in other States.

"The amount allocated to the Disaster Relief Fund is just a share of the Centre. The 15th Finance Commission had allocated a central share of Rs 314 crore to Kerala but the State has only half of it -- Rs 157 crore," he said. He further said the Kerala government has asked Prime Minister Narendra Modi to allow special grants to the States in view of COVID-19 situation and make this an additional consideration for inclusion in the Second Report of the 15th Finance Commission.

"It is inappropriate to portray the central contribution to the Disaster Relief Fund as help for Covid19 prevention," he added.Chief Minister Vijayan also said that from the Disaster Relief Fund, the State government has already given Rs 17 crores to District Collectors for relief works and Rs 15 crore to the Health Department for buying medical equipment.

"As per the norms, only 25 per cent of the State's outlay can be spent on relief work and 10 per cent on purchasing equipment. Only this much can be used from the State Disaster Relief Fund (SDRF) amount. The state is using budgetary amounts to distribute welfare pensions," he added.

( With inputs from ANI )