Thiruvananthapuram: Revealing the shocking state of the state’s finances, the Finance Department has come out with figures that show that the revenue deficit of the state during the ongoing 2016-17 fiscal would be higher than even the borrowing limit of the state; an unprecedented situation.
It is in this context that the LDF Government has decided to come out with a White Paper on State Finances on the eve of the ‘Alteration Memorandum’ to be presented on July 4.
According to the Department estimate, the revenue deficit will touch Rs 18,200 crore while the borrowing limit of the state this fiscal is Rs 18,000 crore. This means all the money that is borrowed, and even more, goes not into development but to finance the deficit. The new estimate is double the revenue deficit figure of Rs 9897.46 crore given in the 2016-17 Budget presented by then Chief Minister Oommen Chandy in February. “Never before has the state faced such a crisis. It was as if the UDF government knew it will not return to power,” a top government source said.
The cabinet on Wednesday discussed the fiscal situation in detail. Finance minister Dr T M Thomas Isaac used the Finance Department estimates to counter Chandy’s claim that the Treasury had Rs 1000 crore when the UDF left office. Immediate liabilities like social security pensions, contractor arrears, money owed to welfare boards, and funds held back from departments together add up to nearly Rs 6000 crore. Another Rs 6000 crore has to be found to meet pending payments for big projects, and arrears of paddy procurement. Then, there is over Rs 4000 crore that has to be passed on to local bodies. After hearing Isaac, the cabinet concluded that the pathetic state of affairs would have to be revealed to the public.
