Kerala Appeals for Market Borrowing Limit Reversal Amid Fiscal Pressure

The Kerala government has requested the Union Finance Ministry to reverse a Rs 3,323 crore cut in its market borrowing limit. The state has initiated steps to create a Guarantee Redemption Fund. The aim is to maintain fiscal stability amid revisions in borrowing rules affecting the borrowing ceiling.

The Kerala government has urgently appealed to the Union Finance Ministry to reverse a Rs 3,323 crore reduction in its market borrowing limit.

According to Kerala Finance Minister K N Balagopal, the state has already begun the process of setting up a Guarantee Redemption Fund (GRF) as mandated by new federal borrowing rules, aiming to address fiscal pressures.

Under new guidelines, failure to establish the GRF results in borrowing limit cuts. With a revised borrowing cap for FY 2025–26, Kerala seeks immediate intervention to prevent fiscal instability.