Kerala faces serious financial crisis: Finance Minister

Thiruvananthapuram, Aug 10 (UNI) Kerala Finance Minister T M Thomas Issac today warned of serious financial crisis in the coming months and said that the government will have to go for overdraft next month in view of Onam, the national festival of Kerala, to overcome the crisis.

''The state's revenue has not increased in tune to the expenditure. Already with the new pay revision for the government employees, we expect 40 per cent increase in the expenditure. But the revenue has not increased,'' he told a conference of the sales tax officials.

Dr Issac said the crisis had also been developed due to the reduction in the borrowing capacity of the state, which had affected the state's development agenda. The Centre had assured of removing the borrowing limit but had placed new formula in this regard which was not welcome to the financial condition of the state. The Centre for removing the borrowing limit had put forward certain conditions like withholding Rs 200 crore due to Kerala as a debt-stressed State, he said.

Lashing out a the Centre for imposing such conditions, Mr Issac said that this would be challenged politically taking every one into confidence.

He also said that the special cabinet meeting slated for August 23 would evaluate the state's present economic condition and the steps to be taken for overcoming the crisis.

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