Kerala Seeks Financial Leeway from Centre

Kerala Chief Minister VD Satheesan met Prime Minister Narendra Modi and Finance Minister Nirmala Sitharaman to discuss the state's financial issues, seeking exemptions for highway project spending from borrowing limits. He plans to release a financial white paper. The Silverline rail project was also addressed.

Kerala Chief Minister VD Satheesan on Tuesday discussed Centre-state issues during his meetings with Prime Minister Narendra Modi and Finance Minister Nirmala Sitharaman, and sought exemption for national highway project spending from the state's overall borrowing limit.

Satheesan, who took over as Chief Minister on May 18, said Kerala is facing a financial crisis and that his government would be releasing a white paper about the state's finances.

At a media briefing in the national capital, he said any issues, such as the absence of a utility certificate or audited accounts that are hindering central funding for projects, would be examined.

For the national highway projects, Kerala has spent Rs 5,580 crore, and the state has been demanding that the amount be exempted from the state's borrowing limit, which is 3.5 per cent of the Gross State Domestic Product (GSDP).

Out of the limit, 0.5 per cent is conditional, subject to utilisation for the power sector.

Satheesan said he has requested the Centre to provide the exemption as the state is now only able to borrow a smaller amount.

During the meetings with the prime minister and the finance minister, the chief minister said certain Centre-state issues were discussed and expressed hope that there would be a positive response.

Regarding the Silverline semi-high speed rail project, the chief minister said the project was scrapped by the Centre and the previous state government.

The current government has only cancelled the notification whereby land was taken over for the project, and the move would provide relief to people who have not been able to sell or buy the land, he said.