THIRUVANANTHAPURAM: It is not just the the state government's investments, its loans and advances too are getting stuck in the gullet of moribund and inefficient state-run bodies. As per the latest Finance Accounts figure available, an amount of Rs 13,010 crore was outstanding as loan. Till March 31, 2016, 76 government institutions have defaulted in repayment of loans, and the total arrears have swelled to Rs 9,328 crore, a sum greater than even the state's annual capital expenditure. Of the total arrears, the principal amount is Rs 5809 crore and interest part is Rs 3519 crore.
About 89 per cent of the arrears belong to five institutions, three of them public utilities: Kerala Water Authority (Rs 3,890 crore), Kerala State Electricity Board Limited (Rs 1,760 crore), Kerala State Road Transport Corporation (Rs 1280 crore), Kerala State Housing Board (Rs 1180 crore) and Kerala State Cashew Development Corporation (Rs 199 crore). During the 2015-16 fiscal, the State Government also released loans to 16 defaulting institutions amounting to Rs 408 crores.
The total outstanding loans and advances during 2015-16 increased by Rs 690 crore compared to those of the previous fiscal. The major disbursement of loans and advances during the 2015-16 fiscal was to KSRTC (`214 crore), Kerala Water Authority for implementing the Water Supply Project assisted by the Japan International Co-operation Agency (`81 crore), Kerala Co-operative Textile Federation (Rs 68 crore) and House building advance to state government officers (Rs 195 crore). Interest received against these loans remained less than one per cent during the period 2011-12 to 2015-16, and was 0.2 percent during 2015-16 as against the average cost of borrowing of 7.3 per cent during the year.
It has been found that the State Government had released 79 loans totalling Rs 83.96 crore to 19 institutions during the period from 1991-92 to 2005-06, without specifying the terms and conditions for repayment. “As long as politics continue to rule the roost, governments will forever be at a loss to reduce non-performing assets and sanitise the balance sheet of the state government,” a top finance department official said....