Thiruvananthapuram: The government on Monday may enforce a ‘secret ban’ on the passing of bills from the Treasury to prevent the state from running into overdraft.
The government will run into overdraft if it is forced to spend more money than what is left in the Treasury.
A secret ban can be enforced on the spending of the balance amount through the Integrated Finance Management System implemented in the Treasury. An overdraft can be avoided this way.
Even if the departments submitted bills online, they would not be accepted by the Treasury if a secret ban is in force.
The departments also wouldn’t understand the reason. During the first term of the Pinarayi Government, this method was resorted to several times to prevent the Treasury from running into overdraft. If the Treasury doesn’t receive the State’s GST share and the grant to meet its fiscal deficit today, the Treasury’s functioning will be disrupted. To avoid this, the state can secure an overdraft of Rs 1,683 crore from the Reserve Bank of India.
However, the Government is likely to resort to software management to avoid the blemish of going into an overdraft.
There can be Treasury controls in the coming days. The expenses to the tune of Rs 15,000 crore during Onam resulted in the emptying of the state coffers.
Apart from taking a loan of Rs 4,000 crore, a sum of Rs 1,683 crore was received from the Reserve Bank as the Ways and Means Advance.
Meanwhile, State Finance Minister KN Balagopal admitted that the state was facing financial difficulties.
He, however, said that controls would not be needed soon. "But can't say if controls will be needed in future.
Taking overdraft is legal, but the current situation doesn't warrant it," he said.
