'Kerala to borrow Rs 7,200 cr to overcome crisis'

Thiruvananthapuram, Aug 28: Kerala Finance Minister T M Thomas Issac today said the state will be borrowing Rs 7,200 crore to meet the financial crisis after which the accumulated debt will reach Rs 50,000 crore.

''The Centre has had put forward certain conditions like withholding Rs 220 crore due to Kerala as a debt-stressed state for raising the borrowing limit. As such, Kerala will be losing about Rs 1,000 crore in five years,'' he told a press conference here.

Earlier, the Centre had not agreed to raise the borrowing limit of the state on the ground it was a debt stressed state.

But it removed the borrowing limit by placing a formula which was not welcome considering the financial condition of the state, Dr Issac said.

Noting that Kerala was the only state in India with a deficit cash balance, he said the deficit could be brought down to zero if the government resorted to certain drastic cuts in the plan size and other areas.

''But we do not want to do it. We will try to overcome this by other means. Some states like Karnataka and Uttar Pradesh have surplus money. The question is not of surplus money but how the money is being utilised,'' he said.

On the health insurance scheme for those below the poverty line, Mr Issac said the previous United Democratic Front Government had brought the scheme in haste and it lacked transparency.

''The Centre had not given the state permission for such a scheme and said the money would be given only if a public sector undertaking was entrusted with the project.

But the previous government entrusted the project, a private general insurance company,'' he said.

''Some of the money collected from the poor people are with the private insurance company, the Kudumbasree and panchayats. We should have to think on how this money could be returned to the people.'' Asked if there was any plan to shelve the scheme, he said the government was seriously thinking of redesigning the whole scheme.

UNI