Onam spending hits Rs 15,000 crore, government considering revenue options – The New Indian Express

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By Express press service

THIRUVANANTHAPURAM: After burning nearly Rs 15,000 crore during the Onam season, the Kerala government is now looking for other sources to generate funds to manage expenses for the rest of the month.

We learn that the government can opt for the overdraft facility to raise money. Sources said the money was spent on salaries and pensions, social security pension and other social protection measures, among others, during the Onam season. However, they said there was fiscal pressure, not a financial crisis, and there was no need for further restrictions on the Treasury.

“There is a budgetary tension, not a crisis. The use of options such as ways and means and overdraft is common for a government when expenses are high. Higher spending due to last year’s salary and pension review, coupled with the shortage of central funds, explain the current tension. The government did not cut social spending during Onam,” said a senior source at the finance ministry. The source said there was no immediate need for further restrictions on Treasury payments.

At present, there is already a restriction in the treasuries on payments above Rs 25 lakh. Such transactions require special authorization from the finance department. So far, the state has resorted to market borrowing worth Rs 4,000 crore.

Finance Minister KN Balagopal previously said the state would face a shortage of Rs 23,000 crore in the flow of funds from the Center this financial year as the Union government adjusted borrowing out budget worth Rs 14,000 crore in the state net borrowing ceiling, in addition to effecting a reduction in Kerala’s revenue deficit grant and stopping the distribution of compensation from the GST to States.

THIRUVANANTHAPURAM: After burning nearly Rs 15,000 crore during the Onam season, the Kerala government is now looking for other sources to generate funds to manage expenses for the rest of the month. We learn that the government can opt for the overdraft facility to raise money. Sources said the money was spent on salaries and pensions, social security pension and other social protection measures, among others, during the Onam season. However, they said there was fiscal pressure, not a financial crisis, and there was no need for further restrictions on the Treasury. “There is a budgetary tension, not a crisis. The use of options such as ways and means and overdraft is common for a government when expenses are high. Higher spending due to last year’s salary and pension review, coupled with the shortage of central funds, explain the current tension. The government did not cut social spending during Onam,” said a senior source at the finance ministry. The source said there was no immediate need for further restrictions on Treasury payments. At present, there is already a restriction in the treasuries on payments above Rs 25 lakh. Such transactions require special authorization from the finance department. So far, the state has resorted to market borrowing worth Rs 4,000 crore. Finance Minister KN Balagopal previously said the state would face a shortage of Rs 23,000 crore in the flow of funds from the Center this financial year as the Union government adjusted borrowing out budget worth Rs 14,000 crore in the state net borrowing ceiling, in addition to effecting a reduction in Kerala’s revenue deficit grant and stopping the distribution of compensation from the GST to States.

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