In a move that could severely affect State finances, the Centre has drastically cut down the State’s borrowing limit, Finance Minister K.N. Balagopal said on Friday.
The borrowing limit has been set at ₹15,390 crore. For the entire fiscal, the State government had been expecting eligibility for ₹32,442 crore (3% of the GSDP). For the first nine months, the State was expecting the limit to be set at ₹22,000 crore.
Mr. Balagopal condemned the Centre’s decision in strong terms, accusing it of attempting to strangle the State financially. Terming the decision a challenge thrown to the people of Kerala, he said that the Centre had made it a practice to deny or reduce grants and loans to the State.
