17 July 2023, 02:00 AM IST
Costs are skyrocketing
Photo: REUTERS
Thiruvananthapuram: With the economic crisis becoming extremely serious, the government has been in overdraft for a week. Since there was no surplus in the treasury, he proceeded by taking a perpetual loan. It has been in overdraft for a week after the limit was exceeded. This is the first time such a situation has happened this year.
It was decided to settle the overdraft by borrowing. 2000 crore will be borrowed on the 18th. With this, the overdraft will be cleared, but the government is very worried because the Onam season is coming, when it will have to spend a lot of money. At least 8000 crores will be required for Onam expenses. 15,000 crore debt taken in 2013 is also to be repaid during this Onam.
The only way is austerity as borrowing is controlled by the centre. The government cannot do that. Departments are proposing new expenditure, including the creation of new posts. According to the Accountant General’s provisional figures, the gap between revenue and expenditure in April and May was Rs 9334.39 crore. The assessment of the finance department is that this time it is going through the most serious financial crisis in five years.
Overdraft must be repaid within 14 days
The exchequer should have a surplus of at least Rs 1.66 crore per day. As much as the surplus is less, the Reserve Bank will allow as Perpetual Loan (Ways and Means). A maximum of Rs 1670 crore will be sanctioned in this way. If this amount is not returned to the treasury, it will be overdrafted.
Overdraft is allowed up to an amount equal to the maximum term loan. If the combined amount is not returned to the treasury within 14 days, treasury transactions will have to be suspended.
Perpetual loans and overdrafts are sanctioned at the rate of interest given to the banks by the Reserve Bank. It is argued that this is more convenient for the government than borrowing at high interest rates.
But all this is needed when the coffers run out of money. It is putting pressure on the government. Moreover, the debt sanctioned by the Center till December will have to be cleared early.
Kerala needs 1316 crores immediately
Finance Minister K.N. has asked the Center to pay the outstanding amount of 1316 crores as financial aid for various projects in such a severe financial crisis. Balagopal submitted a petition to Union Minister Nirmala Sitharaman. It was also requested to allow one percent additional loan. It has been pointed out in the petition that the amount of 26,000 crore rupees that was being received from the Center including the abolition of GST compensation has decreased this time.
2023-07-16 20:30:00
#money #treasury #Kerala #overdraft #week
