Thiruvananthapuram: Knocked out clean by the GST regime, a financially wobbly State Government has to mobilise Rs 5500 to Rs 6000 crore at the start of the holiday month of December to not just pay salaries and pension but also for market intervention strategies. A top Finance Department official assured that there would not be any delay in the payment of salaries and pensions. If the government manages to pay on time it will be at the cost of plan development that was on an upswing for the first time in a decade. To find the necessary funds, Treasury restrictions have also been tightened further.
The Finance Department had the other day prohibited the usual practice of drawing and disbursal officers withdrawing funds of incomplete works and purchases, and depositing them in various bank accounts. Department heads have now been instructed to transfer the money directly from the Treasury to the bank account of beneficiaries. An internal audit conducted by the Finance Department had found that around Rs 5000 crore were locked in the bank accounts of drawing and disbursing officers during the last fiscal. "The new diktat will ensure that the money will first lie in the Treasury before it goes out to the bank accounts of the beneficiaries. A share of this money is expected to ease the current liquidity crunch," a top Department official said. The Treasury had already halved its daily outgo to Rs 50 crore.
It has also been asked not to pass bills above Rs 10 lakh, and to pass on costlier bills for the consideration of the Finance Department. The Treasury controls will continue for two more months. In what can be called an irony of development, a high plan spending has depleted the state's resources that had been badly hit by the implementation of the GST regime. Utilisation in the middle of the third quarter has crossed 42 percent, which is considerably higher than the earlier peak of high of 28 percent achieved in the 2012-13 fiscal. GST and, the new Centre-State mechanism of sharing tax revenues, have emptied out the state's coffers, at least temporarily. A high level of fund utilisation has thus become unsustainable, if salaries and pensions have to be paid on time.