The state government is grappling with a profound financial crisis, and its ramifications are acutely impacting the progress of crucial projects across various departments, as revealed by recent data.
In a concerning revelation, despite being well into the first half of the financial year, the government has managed to disburse just 26% of the allocated funds for the multitude of projects outlined in the budget. Of the substantial budget of Rs 22,122 crore designated for state projects, only Rs 5,751 crore has been authorized so far, leaving a staggering Rs 16,371 crore pending.
The situation is further exacerbated by the central government’s decision to curtail the state’s borrowing limit, leaving no room for additional funds this year. This looming fiscal constraint threatens to plunge the government even deeper into a crisis when it comes to project execution.
With each passing month, the state government is barely scraping together sufficient funds for essential obligations like employee salaries, retired staff pensions, and everyday expenses, relying heavily on borrowing and tax revenue.
In a desperate bid to secure finances, the government is currently in the process of seeking a loan of Rs 2,000 crore from a consortium of banks, resorting to surcharges on fuel to fund welfare pensions. However, hope is waning as the central government remains steadfast in its refusal to raise the state’s borrowing limit. Consequently, the government is compelled to allocate its dwindling resources primarily to immediate operational needs, inevitably curtailing project allocations.
Amidst this turmoil, the Finance Department finds itself under intense pressure from government contractors and various departments seeking the release of much-needed funds. The restriction on approving bills exceeding Rs 5 lakh remains in effect, and the Treasury Directorate has issued verbal directives to treasury branches to withhold payments for bills below Rs 5 lakh unless they are of an urgent nature. These stringent measures to control expenditure come in the wake of the government’s hefty expenditure exceeding Rs 10,000 crore during the Onam season. Moreover, the utilization of funds for projects initiated by the Centre stands at a mere 28% at present.
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