Lok Sabha Question No. 452 (UNSTARRED), answered on 2024-02-05
Subject: Restrictions on Borrowing by Kerala
Ministry: FINANCE
Asked by: M. K. Raghavan

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF EXPENDITURE

## LOK SABHA UNSTARRED QUESTION NO. 452 TO BE ANSWERED ON MONDAY, 5 th  FEBRUARY, 2024 16 MAGHA, 1945 (SAKA)

## Restrictions on Borrowing by Kerala

## 452. SHRI M.K. RAGHAVAN:

Will the Minister of FINANCE be pleased to state:

- (a) whether the Union Government has put restrictions on borrowing by the State Government of Kerala and if so, the details thereof and if not, the reasons therefor;
- (b) whether the Government has any data regarding the total debt of Kerala in comparison to other States of the country and if so, the details thereof;
- (c) whether the Government has restricted borrowing limits for any other States of the country and if so, the details thereof;
- (d) whether the Union Government has given all funds to the State Government of Kerala as is required under Finance Commission recommendations and if so, the details thereof; and
- (e) whether the Union Government has informed the State Government of Kerala that State shall not be given funds due to lapse of filing of required documents and if so, the details thereof?

## ANSWER

## MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI PANKAJ CHAUDHARY)

(a) to  (c)  Based  on  the  recommendation of the 15 th Finance Commission (XV-FC), the normal Net Borrowing Ceiling (NBC) of all States including Kerala has been fixed at 3 percent of the Gross State Domestic Product (GSDP) for the financial year 2023-24. Accordingly, the normal NBC of the State of Kerala has  been arrived  at Rs.  32,442  crore for  the Financial  Year  (FY)

2023-24.  Besides this, extra borrowing ceiling  of Rs.  1,787.38 crore has been allowed to the State Government of Kerala equivalent to estimated combined share of State and its employees' contribution pertaining to the financial year 2023-24 to be actually deposited with the designated authority  as  per  the  guidelines  of  National  Pension  System  (NPS).  In  addition,  the  State Government of Kerala are also eligible to avail additional borrowing of up to 0.50% of GSDP amounting to Rs. 5,407 crore based on certain performance criteria in power sector.

Union Government applies a common yardstick while fixing the annual borrowing limit of all  the  State  Governments  under  Article  293(3)  of  the  Constitution  of  India.  In  doing  so,  it  is guided by the recommendations of the Finance Commission.

As per Reserve Bank of India's report titled 'State finances: A Study of Budgets of 202324',  the  State-wise  details  of  total  outstanding  liabilities  of  the  State  Governments  including Kerala at the end of March 2022, March 2023(RE) and March 2024 (BE) are at Annexure .

(d)  and  (e)  The  Department  of  Expenditure  releases  grants  in  aid  recommended  by  the  15 th Finance  Commission  as  accepted  by  the  Union  Government  on  01.02.2021  vide  Explanatory Memorandum  to  the  Action  Taken  on  the  recommendations  of  the  Commission  based  on recommendations from nodal Ministry(s) and fulfillment of stipulated conditions. The details of grant  released  to  the  State  Government  of  Kerala  during  the  award  period  of  15 th Finance Commission are as under:

(Rs. in crore)

|       |                                                    | Year     | Year     | Year                      |
|-------|----------------------------------------------------|----------|----------|---------------------------|
| S. No | Grant                                              | 2021-22  | 2022-23  | 2023-24 (upto 31.01.2024) |
| 1.    | Post Devolution Revenue Deficit Grant              | 19891.00 | 13174.00 | 3957.50                   |
| 2.    | Union Share of State Disaster Response Fund (SDRF) | 251.20   | 264.00   | 138.80                    |
| 3.    | Union Share of State Disaster Mitigation Fund      | 62.80    | 0.00     | 66.00                     |
| 4.    | Urban Local Bodies grants                          | 336.00   | 604.00   | 348.81                    |
| 5.    | Rural Local Bodies grants                          | 1203.00  | 1246.00  | 630.00                    |
| 6.    | Health Sector grant to local bodies                | 427.13   | 94.30    | 458.03                    |
|       | Grand Total (1+2+3+4+5+6)                          | 22171.13 | 15382.30 | 5599.14                   |

## Annexure referred to in the answer of part (b) of Lok Sabha Unstarred question no. 452 for 05.02.2024

## State-wise details of total outstanding liabilities of State Governments at the end of March 2022, March 2023(RE) and March 2024 (BE)

(Rs. In crore)

| State             | 2022 (Actuals)   | 2023 (RE)   | 2024 (BE)   |
|-------------------|------------------|-------------|-------------|
| Andhra Pradesh    | 3,80,548.5       | 4,28,715.7  | 4,85,490.8  |
| Arunachal Pradesh | 15,924.6         | 18,850.4    | 21,654.2    |
| Assam             | 1,02,366.3       | 1,26,281.4  | 1,50,900.4  |
| Bihar             | 2,57,634.7       | 2,93,850.5  | 3,19,618.3  |
| Chhattisgarh      | 1,06,451.1       | 1,09,664.1  | 1,22,164.1  |
| Goa               | 29,209.2         | 30,743.2    | 34,758.4    |
| Gujarat           | 3,88,582.8       | 4,21,018.2  | 4,67,464.4  |
| Haryana           | 2,79,453.3       | 3,05,586.9  | 3,36,253.0  |
| Himachal Pradesh  | 73,541.4         | 86,639.2    | 94,992.2    |
| Jharkhand         | 1,13,568.1       | 1,18,855.5  | 1,31,455.6  |
| Karnataka         | 5,03,987.7       | 5,35,408.1  | 5,97,618.4  |
| Kerala            | 3,60,036.9       | 3,89,312.3  | 4,29,270.6  |
| Madhya Pradesh    | 3,25,193.0       | 3,65,624.4  | 4,18,056.0  |
| Maharashtra       | 6,06,407.1       | 6,53,197.0  | 7,22,887.3  |
| Manipur           | 15,334.0         | 17,376.4    | 19,245.8    |
| Meghalaya         | 16,927.6         | 18,845.1    | 20,029.9    |
| Mizoram           | 10,953.7         | 12,880.0    | 14,039.3    |
| Nagaland          | 15,834.5         | 17,085.2    | 18,165.8    |
| Odisha            | 1,39,002.4       | 1,29,872.9  | 1,20,986.9  |
| Punjab            | 2,84,923.2       | 3,16,346.1  | 3,51,130.2  |
| Rajasthan         | 4,63,832.8       | 4,99,529.0  | 5,62,494.9  |
| Sikkim            | 11,482.2         | 13,331.4    | 15,529.5    |
| Tamil Nadu        | 6,67,974.9       | 7,41,497.7  | 8,34,543.5  |
| Telangana         | 3,14,852.9       | 3,52,061.0  | 3,89,672.5  |
| Tripura           | 22,438.6         | 23,360.5    | 26,505.8    |
| Uttar Pradesh     | 6,46,321.3       | 6,93,577.1  | 7,69,245.3  |
| Uttarakhand       | 78,952.1         | 80,120.4    | 89,466.0    |
| West Bengal       | 5,48,235.9       | 5,96,725.2  | 6,58,426.2  |

Source: RBI report titled 'State finances: A Study of Budgets of 2023-24'.

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