Kerala Government's debt mounts to Rs. 41,709 cr.

THIRUVANANTHAPURAM: The Finance Minister, Vakkom Purushothaman, has said that the debts of the State Government had reached Rs. 41,709 crores as of March 31, 2005, according to provisional figures available with his department.

Mr. Purushothaman was candid about the State's financial difficulties, when he addressed a press conference here on Tuesday. "We have not been successful in tackling our financial difficulties. You should, however, give credit to the Government for managing the situation well. Things are going on without any hitches," he said.

He claimed that the Government had been able to check the growth in debt. Borrowings increased by only 11.37 per cent in 2004-05, compared to 20.58 per cent in 2003-04, 15.25 per cent in 2002-03, 12.67 per cent in 2001-02, 18.55 per cent in 2000-01 and 28.5 per cent in 1999-2000.

When the UDF came to power in 2001, the debts of the Government were of the order of Rs.23,918 crores. Responding to a question, he said he did not have with him the figures showing the year-to-year growth in debt in real terms for the above period.

On salary and pensions


"The debts are bound to grow since we have to spend up to 92 per cent of our revenue receipts on salary and pensions alone. No development activities will take place if we do not borrow," he said. Another reason, according to him, was that the Government was often constrained to spend more funds than the budgeted amounts on certain activities. "Release of funds often exceeds the allocations made in the Budget," he said, suggesting that managing the finances was often beyond the control of the Finance Minister.The Minister said the debt problem was not Kerala-specific. The borrowings were going up everywhere. In some of the States, the burden had crossed Rs.1 lakh crores, Mr. Purushothaman said.

Treasury restrictions


Referring to the treasury restrictions the Government had to impose on May 23, he said the matter was purely a case of temporary liquidity problem.