Kerala Appeals to Centre for Financial Flexibility Amid Onam Festivity

Kerala seeks permission from India's central government to borrow an additional Rs 7,900 crore and restore Rs 4,300 crore deducted amid fiscal challenges. The state cites fiscal health strain due to recent deductions and the need to meet upcoming Onam festival expenditures. A memorandum was submitted by Kerala Finance Minister K N Balagopal to Union Finance Minister Nirmala Sitharaman.

Kerala has called on the central government to permit an extra borrowing of Rs 7,900 crore and to restore Rs 4,300 crore that was deducted, which has impacted the state's fiscal balance.

With its debt-GSDP ratio dropping to 34.13% in 2024-25 from 38.47% in 2020-21, the state seeks to alleviate fiscal strains exacerbated by these deductions, especially with the Onam festival approaching.

Finance Minister K N Balagopal submitted a detailed memorandum to Finance Minister Nirmala Sitharaman, addressing Kerala's pressing financial needs and the challenges in sustaining its expenditure due to reduced fiscal space.

(With inputs from agencies.)