Lok Sabha Question No. 652 (UNSTARRED), answered on 2023-07-24
Subject: Financial Crisis in Kerala
Ministry: FINANCE
Asked by: N.K. Premachandran

## GOVERNMENT OF INDIA

## MINISTRY OF FINANCE

## DEPARTMENT OF EXPENDITURE

## LOK SABHA

## UNSTARRED QUESTION NO.  652

## TO BE ANSWERED ON MONDAY, 24 th  JULY, 2023

## Sravana 2, 1945 (Saka)

## Financial Crisis in Kerala

## 652. SHRI N.K. PREMACHANDRAN:

Will the Minister of FINANCE be pleased to state:

- (a) whether the Government is aware that Kerala is in a severe financial crisis;
- (b) if so, the details thereof and the action taken by the Government thereon;
- (c) whether  the  Government  of  Kerala  has  requested  to  the  Union  Government  for relaxation packages;
- (d) if so, the details thereof and the action taken by the Government thereon;
- (e) whether the Union Government included all the loans of the Government of Kerala within the borrowing capacity of the Government of Kerala;
- (f) if so, the amount borrowed under KIIFB;
- (g) whether the Union Government proposes to sanction special grant for Government of Kerala for overcoming the present crisis;
- (h) if so, the details thereof and the action taken by the Government thereon;
- (i) whether the Union Government proposes to consider the request of Government of Kerala for increasing its borrowing limit; and
- (j) if so, the details thereof and the action taken by the Government thereon?

## ANSWER

## MINISTER OF STATE IN THE MINISTRY OF FINANCE

## (SHRI PANKAJ CHAUDHARY)

(a) & (b) Fiscal performances and fiscal situations of the States including State of Kerala is monitored by the respective State Legislatures. State Government of Kerala has not informed about any such severe financial crisis in the State during the financial year (FY) 2023-24.

The 15 th Finance Commission (FC) made assessment of revenue and expenditure of the State Government of Kerala and has recommended revenue deficit grant of Rs. 37,814 crore to the State for its award period. Union Government has accepted the recommendation of the 15 th Finance Commission for providing revenue deficit grant of Rs. 37,814 crore to the State  during  the  15 th FC  award  period  of  2021-22  to  2025-26.  Out  of  the  recommended revenue deficit grant of Rs. 37,814 crore, grant of Rs. 34,648 crore has already been released to the State Government of Kerala so far. (c ) & (d)  No Sir, no such request from the State Government of Kerala has been received in the Department of Expenditure during financial year 2023-24 citing severe financial crisis in the State. (e) Yes Sir, the Union Government has included all the loans of the Government of Kerala within the borrowing ceiling of the Government of Kerala including the loans taken by  State  Public  Sector  Companies,  Special  Purpose  Vehicles  (SPVs)  and  other  equivalent instruments, where principal and/or interest are to be serviced out of the State Budgets and/or by assignment of taxes/cess or any other State's revenue. (f) State of Kerala vide letter dated 10.05.2023 has declared estimated borrowings of Rs.  2,500  crore  by  Kerala  Infrastructure  Investment  Fund  Board  (KIIFB)  in  FY  2023-24, where  principal  and/or  interest  is  to  be  serviced  out  of  the  State  Budgets  and/or  by assignment of taxes/cess or any other State's revenue. (g) & (h) State  Government  of  Kerala  has  not  sought  any  special  grant  on  the  ground  of severe financial crisis in the State during FY 2023-24. Union  Government  of  India  applies  a  common  yardstick,  while  fixing  the Governments  under  Article  293(3)  of  the Constitution of India. No proposal for increasing the borrowing limit of State Government

(i) & (j) annual borrowing  limit of all the State of Kerala is under consideration in the Department of Expenditure presently.

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