State to borrow Rs1436 cr on Sept 27 through issue of 18-yr SDLs
By CL Jose
THIRUVANANTHAPURAM/September 24-2022: After almost a month, since August 29, Kerala is borrowing Rs1436 crore from the market by issuing securities or state development loans (SDLs) of 18-year tenure on September 27.
With this, the total borrowings this financial year by issuing securities through auction will aggregate Rs8,936n crore, far less than what the state had borrowed during the same period last financial year (FY22), at Rs17,000 crore.
The borrowing this time is happening at a time when the market is agog with the debate whether the state will be forced to go for overdraft (OD) from the Reserve Bank of India (RBI) as the state coffers have reportedly dried up.
However, though in defence of the planned controversial overseas trips by a few ministers of the state and its attendant expenditure for the state that is said to be struggling to stay afloat, the finance minister, KN Balagopal, has ‘clarified’ that the state is not in a financial crisis as has been made out by certain sectors.
The state last week received Rs2245.82 crore as the share of Central taxes and duties for August, being the 1.925 per cent share of the Centre’s divisible pool for the month.
Further, Kerala’s GST revenue for August witnessed a smart growth of 26 per cent to Rs2036 crore compared with Rs1612 crore the state earned for the same period last year.
Kerala’s market borrowing this financial year, along with a few other states, has been curtailed by the Centre citing the off-balance sheet borrowings made by the state using other state entities such as KIIFB and KSSPL.
This has forced Kerala to mark down its borrowings from the figure earlier announced by RBI – Rs9000 crore each for the first two quarters of the current financial year.
The state’s swelling debt has always been a hot topic, more so in the past few years, with several economists and public finance experts expressing concerns about the sustainability of the growing liabilities book.
While the interest paid by the state against its borrowings ten years ago, in March 2012, was Rs4952.59 crore, down the line, in March 2022, the same has surged more than three-fold to RsRs19,923 crore.
