Kerala facing 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 the government will have to go in for overdraft next month in view of 'Onam', the national festival of Keralites, to overcome the crisis.

''The state's revenue has not increased in tune with 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 developed due to the reduction in the borrowing capacity of the state, which had affected the state's development agenda. The Centre had assured to remove the borrowing limit but had placed new formula in this regard which was not good for the financial health of the state. For removing the borrowing limit the centre had imposed certain conditions like withholding Rs 200 crore due to Kerala as a debt-stressed State, he said.

Lashing out at the Centre for imposing such conditions, Mr Issac said this would be challenged politically taking everyone into confidence.

He said 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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