Kerala government liability set at Rs 31,800 crore

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Thiruvananthapuram: Various companies, public sector enterprises and semi-governmental institutions in Kerala have been granted loans amounting to Rs 31,800 crore, according to the year-end report of the Comptroller and Auditor General (CAG).

The state government will be liable for loans under the Collateral Act if borrowers fail to repay.

The CAG has included loans from the Kerala Infrastructure Investment Fund Board (KIIFB) and K-Rail in the government account. This would affect the loans the government has planned to raise through the KIIFB and the Housing and Urban Development Corporation (HUDCO) for the SilverLine project.

The Centre, meanwhile, has warned Kerala that the loan amount provided with the government guarantee will be reduced from the state’s total lending capacity by Rs 32,435 crore for the current financial year.

If borrowings from other companies are also added to the credit of the state and the Center drastically reduces the amount of Kerala’s total lending capacity, the state could only qualify for a loan of Rs 1,000 crore at the during the current fiscal year.

Kerala requested the Center not to include these loans in the government liability account. According to budget estimates, the state has an outstanding debt of over 3.25 lakh crore.

The CAG report prepared on March 31 provided a breakdown of loans raised by various institutions. Kerala State Finance Companies have debt of Rs 12,974 crore, Cooperative Agriculture and Rural Development Bank Rs 5,830 crore, KSRTC Rs 3,178 crore, Kerala Urban and Rural Development Finance Corporation Rs 3,054 crore, Social Security Pension Limited Rs 1,773, Kochi Metro Rs 1,110 crore, Backward Classes Development Corporation Rs 1,078 crore, Kerala Transport Development Finance Corporation (KTDFC) Rs 832 crore and KIIFB Rs 550 crore.

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