Kerala Chief Minister V. D. Satheesan held key discussions with Union Finance Minister Nirmala Sitharaman in New Delhi on Tuesday, focusing on the state’s financial challenges, borrowing constraints, and pending central allocations.
The meeting came during his first visit to the capital after assuming office following the Congress-led UDF’s election victory.
Kerala Seeks Relief on Borrowing Limits
A major point of discussion was Kerala’s demand for relaxation in borrowing restrictions. The state specifically requested that ₹5,580 crore spent on land acquisition for national highway projects be excluded from its borrowing ceiling, arguing that such infrastructure-linked expenditure should not be counted against fiscal limits.
The Chief Minister also pressed for the release of pending central funds and higher allocations under various development schemes.
White Paper on State Finances
Satheesan informed the Finance Minister that the Kerala government will release a white paper on the state’s financial condition in the first week of June. The document is expected to detail revenue stress, expenditure commitments, and fiscal constraints.
KIIFB Liabilities Under Review
The discussions also touched upon the Kerala Infrastructure Investment Fund Board (KIIFB). The state has sought a detailed assessment of its financial liabilities before deciding on future borrowing plans and the institution’s long-term structure.
Welfare Scheme Funding Concerns
The Chief Minister raised concerns over proposed changes in centrally sponsored welfare schemes, particularly the suggestion that states bear a higher share of funding under the Mahatma Gandhi National Rural Employment Guarantee Scheme. He warned that this could significantly increase Kerala’s fiscal burden.
External Economic Pressures
Kerala also highlighted external factors affecting its economy, including dependence on Gulf remittances and rising global oil prices. The state said geopolitical tensions have impacted remittance flows, while higher crude prices are expected to strain a consumer-dependent economy like Kerala’s.
PM SHRI Scheme Also Discussed
The state government said the cabinet will further examine legal and policy issues related to the PM SHRI education scheme before taking a final decision on its implementation.
