Centre not responsible for financial crunch in Kerala, says Union Minister V. Muraleedharan

Union Minister Muraleedharan blames LDF govt's extravagance & mismanagement for Kerala's fiscal crunch. Centre has transferred funds in all eligible instances, but State failed to meet deadlines & adhere to norms, leading to loss of ₹750 crore. Centre has transferred ₹6,04.14 cr under social security pensions & ₹259.63 cr under NFSA. State govt misled public by claiming Centre slashed RD grant, which is issued as per FC norms. Borrowing limit capped at 3% of GSDP. Centre has no role in State's financial crisis.

Minister of State for External Affairs V. Muraleedharan on November 13, 2023 termed “baseless” the Kerala Government’s argument that the Centre was primarily responsible for the State’s financial problems.

Blaming extravagance and financial mismanagement by the Left Democratic Front (LDF) government for the fiscal crunch experienced by Kerala, Mr. Muraleedharan presented a set of figures on Central transfers under various components, saying that the Centre has transferred funds in all eligible instances to the State. Funds may have been withheld in instances where the State has either failed to apply within the deadline or adhere to norms, according to him.

Lapses on the part of the State Government had led to the State losing ₹750 crore in pay revision arrears under the 7th Pay Revision Commission. The State did not keep the March 31, 2022 deadline for submitting its recommendation for receiving the money. Although the Centre had issued two reminders, the State had not responded, according to him.

The State is yet to receive ₹1,925 crore by way of capital expenditure aid for Central schemes. Failure to comply with the norms is the chief hurdle. The State should have submitted the compliance report by September 30, but it has not done so even in the first week of November, Mr. Muraleedharan alleged.

In the case of the health grant disbursed through local bodies, the Centre has so far transferred ₹421.81 crore in 2022-23. The remaining ₹137.14 crore has been withheld on the grounds that the State has not complied with the norms, he said.

There are also instances where the State Government has either diverted the Central allocation for other purposes or allowed it to lapse. Of ₹13,286 crore sanctioned under the Pradhan Mantri Matsya Sampada Yojana in the fisheries sector, Kerala has spent only ₹7,855.95 crore, he said.

At the same time, the Central share of the social security pensions, including arrears, was transferred to the State last month. An amount of ₹6,04.14 crore was transferred under the widow, disability and old age pensions in this regard. The State is yet to file the application for the second instalment, he said.