"The new Government is facing a financial debacle of gigantic proportions. I expect the new Government will come up with a white paper on the financial status of the state in due course."
"I am sure the Government will attempt to face this challenge squarely and restore the financial health of the state," Narayanan said in his customary inaugural speech of the budget session of the Assembly.
He said the new government has inherited a massive debt burden. It is also faced with a major revenue and fiscal deficit besides being burdened with a huge amount of unpaid bills, he said.
Added to this was the severe under-provisioning of the budget, he said.
"The debt burden has already reached Rs 1,85,660.47 crore on March 31, 2011 and is estimated to go up to a staggering Rs 2,03,488 crore during the course of this year," the governor said.
"It was also found that revenues projected for 2010-11, as per the revised estimate, were highly overestimated, while the expenditure appeared to have been understated significantly," he said.
"Taking a realistic view of the circumstances, the state is likely to face a cash deficit of as high an amount as Rs 9,000 crore during the current financial year. As regards the under-provisioning in vital areas of social infrastructure and human development, it could be as high as Rs 3,000 crore," Narayanan said.