The Centre’s policies are the main hindrance to the state government’s efforts for the creation of New Kerala, Chief Minister Pinarayi Vijayan has said.
“Despite the good achievements in tax revenue and domestic production, the financial crisis arising as part of the central government’s policies is tightening the state. The opposition, which should stand for the people against these bad policies, attacks the state government,” Vijayan said in a press meet on Saturday.
As per the recommendations of the 15th Finance Commission, Kerala can borrow up to 3 per cent of its domestic revenue unconditionally and 0.5 per cent subject to implementation of reforms in the power sector, he said.
“But the central government has reduced Kerala’s loan limit with retrospective effect from 2021-22 by including the loan taken by independent institutions in the state’s loan limit. Due to this, there has been a reduction of Rs 6,000 crore in the total credit limit for Kerala in the financial year 2023-24,” the CM said.
The Union Finance Ministry overrules the recommendations of the Finance Commission appointed under Article 280 of the Constitution, the CM alleged.