Kerala Finance Minister Says State's Financial Position Really Bad, CM Vijayan Tweets Rs 1,762 Cr 'Pongal Pension'

Kerala's Finance Minister, K.N. Balagopal, expressed that the state's financial condition is extremely dire.

Kerala Chief Minister Pinarayi Vijayan today said that around 60 lakh people in the state will be receiving Rs 3,200 each to celebrate Onam. CM Vijayan said that the fund disbursement will be completed by August 23. Though CM Vijayan also slammed the Centre alleging suspension of funds since 2021. "Around 60 lakh people will receive Rs 3,200 each as a social welfare pension to celebrate Onam. Rs 1,762 Cr has been allocated, including Rs 212 Cr for the welfare board pension, despite the Union Govt's suspension of funds since 2021. Disbursement will be completed by August 23rd," said Vijayan.

Conversely, Kerala's Finance Minister, K.N. Balagopal, expressed that the state's financial condition is extremely dire. "Our financial position is really bad. The Centre has not only tied our hands, but also our fingers after they slashed funds,” said Balagopal.

Around 60 lakh people will receive ₹3,200 each as a social welfare pension to celebrate Onam. ₹1,762 Cr has been allocated, including ₹212 Cr for the welfare board pension, despite the Union Govt's suspension of funds since 2021. Disbursement will be completed by August 23rd. pic.twitter.com/gyCyAv6FHd

— Pinarayi Vijayan (@pinarayivijayan) August 18, 2023

The most significant festival for Keralites is Onam. It's during this period that the state government provides its largest payouts, encompassing advance salaries, bonuses, disbursement of pending social welfare pensions, and more. Kerala requires around Rs 19,000 crores to manage the upcoming Onam season, which is set to commence in just 10 days.

“The biggest impediment is the manner in which the Centre has slashed our limit of borrowings,” said Balagopal. Around Rs 40,000 crores of borrowings have been slashed, leaving Kerala, a consumer state left to tighten the belts to the maximum. Kerala is now preparing to borrow another Rs 2,000 crores in the coming days and after which it will be left with a mere Rs 2,021 remaining for the calendar year.

Kerala government has been criticising the Modi government ever since the revenue deficit grant given annually has been slashed drastically from Rs 19,000 crores to Rs 13,000 crores and this time it's a mere Rs 4,000 crores. 

Besides financial stress, the state is also staring at the worst drought of the past few years as the state has recorded a 44 per cent deficit in seasonal rainfall. For the period June 1 to August 16, Kerala received only 877.2 mm of rainfall whereas normal rainfall figures recorded for the Southwest Monsoon in the state are 1,572.1 mm, according to the India Meteorological Department. This translates to a 44 per cent deficit this season. (With agency inputs)