"There Can't Be Different...": Kerala Governor On States' Borrowing Limits

Kerala Governor Arif Mohammed Khan on Monday said recent measures to curtail borrowing capacities of the states have constrained their efforts in various social and infrastructure sectors.

Reading out the policy document of the state government in the Assembly, the Governor said while fiscal discipline has to be enforced, there cannot be different yardsticks for the Centre and the states.

Mr Khan said that for the body politic of the nation to be strong, it needs strong limbs and since states have heavy responsibilities in the social sectors, their fiscal position has to be strong.

"Recent measures to curtail the borrowing limits of the States constrain the scope of their interventions in the health, education and infrastructural sectors.

"While fiscal discipline has to be enforced in right earnest, there cannot be different yardsticks for state governments, which are not made applicable to the Union Government," the Governor said in the policy address marking the commencement of the Budget session.

At the same time, he also said that he was happy to note that according to the latest report of the Reserve Bank of India on State Finances (2023), Kerala was relatively better off among the states regarding Innovation Index, addressing environmental concerns and providing a wide social security net.

"I am happy to note that Kerala has achieved remarkable economic growth - 12 per cent at constant prices and 17 per cent at current prices," he said.

He said the Kerala government's relentless endeavour to achieve holistic and sustainable development of the state has been recognised time and again by the Union government and reputed international entities.

"Kerala has been ranked at the forefront among the states in the achievement of the Sustainable Development Goals consistently by the Niti Aayog. In the overall Public Affairs Index also, Kerala ranks at the forefront," Mr Khan said.

He further said multi-dimensional poverty in Kerala was only 0.7 per cent, the lowest in the country.

"I am also happy to note that the concerted efforts taken by my government in improving the investment atmosphere of the state have started bearing fruit. My government took several path-breaking initiatives to transform the investment atmosphere to a business-friendly one. Due to the progressive initiatives of the state government, Kerala has improved its position in the 'Ease of Doing Business' rankings," Mr Khan said.

However, the Congress-led UDF opposition in the state Assembly contended that all was not as rosy as was claimed in the policy address by the Governor.

"Kerala is in a very vulnerable fiscal position. Its fiscal position is the most vulnerable in the history of the state," Leader of Opposition (LoP) in the Assembly V D Satheesan said and termed Khan's policy address as the "worst ever" by any Governor.

He alleged that the state government has no money and that is why it was repeating the same statements -- regarding projects -- that were made in the past budget sessions.

Mr Satheesan said the latest policy address indicated a "settlement" between the ruling Left government in Kerala and the Governor who were at loggerheads for the past couple of months on various issues.

"The settlement condition was that there would not be any statement against the Centre. That is why there was not even a single sentence vehemently criticising the policies of the Union government," he further alleged.

The truth is all development activities have stalled, social development schemes have stopped and the government is not able to pay pensions, Mr Satheesan claimed.

"The government is in a tough position. But they are hiding the fact and saying the state's fiscal position is safe," he contended.

The 33-day long budget session of the Kerala Assembly commenced with the Governor's policy address and is scheduled to conclude on March 30.

The debate on the motion of thanks for the Governor's speech is scheduled on January 25, February 1 and 2.

Finance Minister KN Balagopal will present the LDF government's budget for the next financial year on February 3.

The legislature will debate the budget for three days from February 6 to 8.

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)