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31 Dec 2023 5:50 AM GMT
Summary
If the fourth quarter borrowing will take place as published by RBI, the total market borrowing alone by the state during the current financial year could reach Rs34,500 crore
THIRUVANANTHAPURAM:: Kerala has scheduled to borrow Rs7,600 crore from the market during the fourth quarter (Q4) by selling state development loans (SDLs).
A statement released by Reserve Bank of India (RBI) on Saturday has said that Kerala has approached the central bank for its borrowing plan for the fourth quarter.
As per the plan, the state will be borrowing Rs4000 crore during January, Rs3000 crore in February, whereas the remaining Rs600 has been planned for March.
If the fourth quarter borrowing will take place as published by RBI, the total market borrowing alone by the state during the current financial year could reach Rs34,500 crore as the state has already borrowed Rs26,900 crore until December 26 when it borrowed Rs1100 crore.
Interestingly, as per the state’s budget estimate, Kerala’s total borrowings (including market borrowings) have been pegged at Rs39,662.22 crore.
The number becomes relevant given the fact that market borrowings basically constitute only about 60 per cent of the total borrowings of the state in a given year.
Will RBI estimate hold good?
That said, it’s yet to be seen whether the fourth quarter borrowing will take place as scheduled by RBI, as the state’s borrowing has rarely followed the RBI schedule in the past.
Kerala’s borrowing plan has hit the headlines several times as the Centre has restrained Kerala from going the full throttle in borrowing on the ground that the state has guaranteed the borrowings made by several state-owned entities, especially Kerala Social Security Pension Ltd (KSSPL) and Kerala Infrastructure Investment Fund Board (KIIFB).
The Centre had earlier wanted the state to include these guarantees as part of its off-balance sheet borrowings and hence to be deducted from the net borrowing ceiling (NBC) of the state.
This has infuriated the Kerala Government prompting the chief minister Punarayi Vijayan and the finance minister KN Balagopal to make strident remarks against the Central Government.
However, following requests and pressure from Kerala Government, the Centre during the third quarter approved the state to borrow a portion from the fourth quarter quota.
Kerala having exhausted its borrowing limit of Rs21,852 crore for the third quarter ending December 31, 2023, has borrowed Rs3,100 crore from its quota from the fourth quarter (January 1 to March 31, 2023).
