kerala: Kerala has never indulged in reckless borrowing: Fm | Thiruvananthapuram News

Thiruvananthapuram: Finance Minister KN Balagopal has dismissed claims that Kerala’s financial crisis was the result of his indiscipline. Kerala has never indulged in reckless borrowing and despite the constraints, the state has never defaulted on its loan repayment, he said on Monday.
“The Center should also exercise financial discipline. Kerala asks for no largesse; we only ask the Center to let us borrow within the limits of the approved level. The Centre’s borrowings represent 6.9% of its GDP. Kerala has only borrowed 3.4% of its GDP. This is 0.1% below the approved level. I’m not sure any international agency advised the Center not to sanction state borrowing permissions,” he said.
“According to the National Statistics Office (NSO), the inflation rate is the lowest in Kerala. Could the state have achieved this if it had wasted its resources? A better public distribution system and excellent health and education facilities in Kerala are proof of diligent spending by the state. Instead of encouraging a state like Kerala, the Center is trying to harass it,” the FM added.
Balagopal declined to divulge details of the issues raised by the Center on state borrowing. “As meetings at the official level are ongoing, I cannot reveal any details at this time. The terms offered by the Center for State Borrowing are strange and unacceptable. This has been conveyed to them,” he said. .
However, he gave sufficient clues that the Center took a position that borrowings by public sector units of the state, KIIFB and similar agencies should be considered as Kerala’s own borrowings. He said there was no logic in such arguments.
“The Center gives a guarantee to loans taken by public sector units, including the NHAI, so why does it say states should stop doing the same,” he asked.
Balagopal said many states have already announced protest programs against the Center’s new stance on state borrowing. “We are not going that far at the moment. We hope that the issue will soon be resolved through discussions,” he said.
Previously, Center had refused permission for the state to borrow through the sale of state shares through RBI. After heated discussions, the Center then gave conditional permission to the state to borrow Rs 5,000 crore.

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