Thiruvananthapuram: The Kerala government has decided to manage its Onam expenses by taking loans reserved for the final quarter of the financial year. While the state seems to be following its age-old saying, 'Celebrate Onam even if you have to sell your property' for the grand festivities, experts warn that the government is on the verge of a severe financial crisis.
This fiscal year, the central government has set a borrowing limit of Rs 37,512 crore for the state. Of this, Rs 21,253 crore was meant for expenses till December, with only Rs 700 crore remaining. Under these circumstances, the government is already borrowing Rs 4,800 crore from the Rs 16,257 crore that was reserved for the significant expenditures of the final quarter.
In addition to this, the government is also borrowing Rs 1,000 crore at an interest rate of 9% from a consortium of cooperative banks to pay two months' worth of welfare pensions. However, the government has already planned for this resource crunch in the last January-March fiscal by announcing a 50% cut in plan expenditure this fiscal.
Read more: Fears of recession surface as govt declares unprecedented cut in plan funds.
The Kerala government on Friday announced disbursement of a two-month pension for over 60 lakh beneficiaries as an Onam gift. Around 62 lakh people will receive Rs 3,200 each for Onam. This is in addition to the one month's pension that is currently being given.
Besides this Kerala government employees will be given an Onam bonus of Rs 4,000 this month. Employees who are not entitled to bonus will be eligible for Rs 2,750 as special festival allowance. Service pensioners and employees under the contributory pension scheme will be entitled to a special festival allowance of Rs 1,000. All government employees will be entitled to a festival advance of Rs 20,000. Part-time, contingent employees are eligible to get Rs 6,000 as advance on their salaries.