Centre turns down plea to raise borrowing limit

Social security pensions, flood relief in jeopardy

February 16, 2019 11:07 pm | Updated 11:07 pm IST - THIRUVANANTHAPURAM

Pushing the State to the brink of a financial crisis, the Centre is reported to have cold-shouldered the government’s demand to raise the annual borrowing limit.

The Centre’s reported refusal to concede the State’s plea to enhance the limit will have a serious bearing on the rebuilding and rehabilitation initiatives for flood victims, disbursal of individual benefits and the government will be forced to tighten the release of Plan funds for local bodies.

Bills of completed works submitted by local governments will have to be put in queue and payments will have to be restricted till the liquidity crunch is over, sources said.

Though the State is eligible to borrow ₹6,000 crore at the fag end of the financial year, the Centre had slashed ₹1,800 crore from the approved limit. The government’s latest bid to convince the Centre has not yielded the desired results, the sources said.

This is in spite of the local governments setting an impressive record in Plan funds spending in the current year. The Plan funds absorption till February has been pegged at 65% against the 60% during the corresponding period last year and it is bound to rise steadily in March, the sources said.

Already the government has announced its plan to clear the social security and welfare pension arrears from December to April by March .

The Finance Department will have to allocate ₹68 crore to pay the pension arrears and advance for April to 52 lakh pensioners by the third week of March.

Finance Minister T.M.Thomas Isaac has announced in his budget speech for 2019-20 a proposal to hike the monthly pension by ₹100 from April, so that the beneficiaries will get ₹1,200. Subsequently, a decision was made to disburse the enhanced pension in March itself.

The Centre’s diffidence in enhancing the limit is being seen as a political game to push the Left Democratic Front government to the wall in the run-up to the Lok Sabha elections.

The onus for the crisis could be placed on the government and used to the political advantage of the National Democratic Alliance in the elections, the sources said.

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