State trying to avert treasury closure


Centre’s refusal to raise the annual borrowing limit deepens crisis

An acute resource crunch thrust by the Centre’s reported refusal to raise the annual borrowing limit has forced the State government to tap all available sources to avert a treasury closure.

With hardly a fortnight left for the current financial year to draw to a close, the political decision made by the Centre to deprive the State of its right to raise ₹1,800 crore within its eligible limit is feared to deepen the financial crisis that would force the government to call a halt to all treasury payments.

Finance Department sources told The Hindu on Wednesday that resources are being mobilised from all available sources within the ambit of the government to clear the bills submitted to the treasury for payments. But for the routine curbs put in place at the end of every financial year to avoid last-minute bunching of bills, no restriction would be imposed in view of the present funds crunch, sources said.

Such directives for streamlining the presentation of bills have already been issued to heads of departments in advance. As in the past year, local self-government institutions had prepared their annual Plan and secured project clearances well in time.

The fund absorption rate has increased considerably. This has increased the strain on the exchequer, but payments are being made by sourcing funds from welfare fund boards for various segments and all other arms to avert a fiscal breakdown, the sources said.

Certain other bills, mostly of civil works, have been put in queue to tide over the crisis. The Central government decision is being seen as a political move to upset the implementation of various welfare initiatives, mainly distribution of pensions for the indigent and weaker sections. But precautionary steps have already been initiated and the disbursal would be completed as envisaged earlier, the sources said.

A conscious decision has also been made to ensure that execution of Plan projects of local governments is not going awry for want of resources, especially when the State is in the midst of a crucial election.

But the refusal to enhance the borrowing limit and the denial of funds for rebuilding would figure in the poll campaign in the coming weeks, the sources said.

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Printable version | Jan 28, 2020 3:26:47 PM |

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