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‘Kerala facing scarcity of funds to finance plan, capital expenses’

The white paper said for a state that holds a negative cash balance, it is impossible to take on liabilities of worth over Rs 10,000 crore.

kerala, kerala scarcity of funds, kerala assembly, kerala financial crisis, Kerala money crisis, kerala news, india news State finance minister Thomas Issac said the situation is alarming.

Kerala is facing paucity of resources to finance its plan and capital expenditure, according to the white paper on Kerala finances presented in the state assembly on Thursday.

State finance minister Thomas Issac said the situation is alarming. In the last three years of the UDF regime, Budgets placed before the Assembly did not have much reality in terms of either the resources to finance them or with the actual expenditure incurred at the end of the year. Schemes and projects were announced without the funds to back them up.

He said the closing balance as on March 31, 2016, with Reserve Bank of India was kept at Rs 1,643.99 crore. But in reality, approximately Rs 1,800 crore of payment was kept blocked at the treasuries and at the government level. “This has resulted in artificially depicting a positive cash balance while in reality the state was actually maintaining a negative balance,’’ said the white paper.

It said for a state that holds a negative cash balance in reality, it is an impossible task to take on immediate and short-term liabilities of over Rs 10,000 crore.

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This leads to the situation of the new government having to carry forward much of these liabilities. The unavoidable consequence of this financial mismanagement is that the new government which has assumed office becomes tied down meeting these liabilities and paying up dues left behind by the previous government, said the minister.

He said the government would check non-plan revenue expenditure, which was necessitated as the previous government had announced various projects which were not included in the budget and sanctioned as outside the agenda by the cabinet. About Rs 700 crore to Rs 800 crore had been exhausted for the mass contact programme of the former chief minister., June 30

Kerala is facing paucity of resources to finance its plan and capital expenditure, according to the white paper on Kerala finances presented in the state assembly on Thursday.

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State finance minister Thomas Issac said the situation is alarming. In the last three years of the UDF regime, Budgets placed before the Assembly did not have much reality in terms of either the resources to finance them or with the actual expenditure incurred at the end of the year. Schemes and projects were announced without the funds to back them up.

He said the closing balance as on March 31, 2016, with Reserve Bank of India was kept at Rs 1,643.99 crore. But in reality, approximately Rs 1,800 crore of payment was kept blocked at the treasuries and at the government level. “This has resulted in artificially depicting a positive cash balance while in reality the state was actually maintaining a negative balance,’’ said the white paper.

It said for a state that holds a negative cash balance in reality, it is an impossible task to take on immediate and short-term liabilities of over Rs 10,000 crore.

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This leads to the situation of the new government having to carry forward much of these liabilities. The unavoidable consequence of this financial mismanagement is that the new government which has assumed office becomes tied down meeting these liabilities and paying up dues left behind by the previous government, said the minister.

He said the government would check non-plan revenue expenditure, which was necessitated as the previous government had announced various projects which were not included in the budget and sanctioned as outside the agenda by the cabinet. About Rs 700 crore to Rs 800 crore had been exhausted for the mass contact programme of the former chief minister.

First published on: 01-07-2016 at 01:33:44 am
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