Restrictions on treasury payments will be eased from mid-January, Finance Minister T.M. Thomas Isaac has said.
Briefing reporters about the decisions of Kerala Infrastructure Investment Fund Board meeting here on Friday, Dr. Isaac said that but for payments above ₹25 lakh, the existing curbs on treasury payments would go from mid-January. The Centre had permitted the State to avail a loan of ₹6,100 crore and that would ease the stress on resources, he said.
The Centre insisted that the limit for the State to avail itself of loans would be fixed on the basis of the funds parked in the treasury accounts of various departments.
A sum of ₹13,000 crore was parked in the accounts of various departments. These funds were moved to a consolidated fund and the State government took up the issue with the Centre. Hence permission was granted to have a loan of ₹6,100 crore.
But the government would observe strict financial discipline to restrict the expenses. The details would be worked out soon.
Disbursal of salary, service pension and other welfare pensions would not be affected, but certain development projects might be deferred to next financial year, he said.
Economic slowdown would not affect the deposits to KIIFB. The board on Friday cleared projects to the tune of ₹1,353 crore. The total projects approved this year amounted to ₹18,939 crore. Projects worth ₹30,000 crore would be cleared next year.
The slowdown would prove to be an opportunity for potential investors to park their funds in KIIFB. But the repatriation of Keralites from the Gulf countries was a matter of concern. This would have a direct impact on the remittances. It would also affect in the sale of consumables and also the real estate and that would affect tax collection. The government was yet to get the details of the number of repatriates, he said.
Asked about the delay in floating tenders for the works cleared by KIIFB, Dr. Isaac said that stringent norms laid to eliminate awarding of tender excess and cost overruns and hitches in land acquisition were delaying the tendering process, but it would be addressed.
A decision had been made for sanctioning funds for land purchase, he said.
