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Kerala requests Rs 24,000 cr special package in union budget

The Kerala government has requested a Rs 24,000-crore special economic package from the central government in the upcoming union budget. Kerala Finance Minister K.N. Balagopal made this request during a meeting of State Finance Ministers organized by Union Finance Minister Nirmala Sitharaman in New Delhi as part of the pre-budget consultations. Balagopal highlighted that Kerala is facing severe liquidity stress due to recurrent floods, the COVID-19 pandemic, a reduced share from the divisible pool, a lower revenue-neutral rate post-GST implementation, the end of GST compensation and Revenue Deficit Grants, and new borrowing limit restrictions.

Additionally, Kerala has asked for a Rs 5,000-crore package for the Vizhinjam seaport project and approval for the SilverLine semi-high-speed rail project. Balagopal pointed out that the state’s share of tax devolution has significantly decreased from 3.875% under the 10th Finance Commission to 1.92% under the 15th Finance Commission. The discontinuation of GST compensation and reduced borrowing limits have further strained the state’s finances. Therefore, the state government has urged the Centre to raise Kerala’s borrowing limit to 3.5% of the Gross State Domestic Product (GSDP).

Balagopal also expressed concerns about the railway infrastructure in Kerala, which he described as being on the verge of collapse due to the imbalance between traffic load and infrastructure. He called for increased central funding for transport infrastructure development, including roads, railways, metro systems, and ports, as well as urban infrastructure projects in cities and towns. He emphasized the need for additional train services due to the high number of residents working in other states and people traveling to Kerala for jobs and tourism. Balagopal also sought early approval for the SilverLine project and mentioned that Kerala has already spent 25 percent of the land acquisition cost for National Highway widening, amounting to around Rs 6,000 crore.


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