Centre’s Rs 5,900-Crore Borrowing Cut Politically Motivated: Kerala Finance Minister

Thiruvananthapuram: Kerala Finance Minister K N Balagopal on Friday strongly criticised the Union government’s decision to reduce the state’s permissible borrowing limit by Rs 5,900 crore in the final quarter of the current financial year, terming the move politically motivated and unjust.

Balagopal said the state government was informed of the decision through a letter received from the Centre late on Wednesday night. He described the move as an attack on Kerala’s development and welfare programmes and said it would severely affect the state’s financial stability.

The Finance Minister pointed out that Kerala has been facing sustained financial pressure over the past four and a half years. He said the timing of the decision, coming just months ahead of elections, raises serious concerns about the Centre’s intentions. According to him, the borrowing cut is aimed at disrupting welfare schemes and development initiatives in the remaining months of the government’s tenure.

Balagopal alleged that the Centre has repeatedly denied Kerala its rightful share of central taxes and resources, and said the latest move adds to a series of decisions that have adversely affected the state. He described the borrowing cut as an act directed against the people of Kerala.

The Finance Minister also criticised the Centre’s approach to the employment guarantee scheme, stating that the Union government is withdrawing from its responsibilities. He said the removal of Mahatma Gandhi’s name from the scheme and the shifting of financial liability to states would force Kerala to spend more than Rs 2,000 crore annually from its own resources to implement the programme.

Calling the decision a violation of federal principles, Balagopal said such actions undermine cooperative federalism and weaken the financial autonomy of states. He urged the people of Kerala to recognise the political nature of the move and raise strong opposition to the Centre’s decision.