Thiruvananthapuram: The state government implemented stricter controls over treasury payments on Wednesday by lowering the limit for bills to be cleared without restrictions from Rs 25 lakh to Rs 5 lakh. This restriction also applies to local bodies, impacting their payments. Under the new rule, bills exceeding Rs 5 lakh require approval from the finance department before being cleared, potentially causing delays in payments even for smaller amounts. A letter on treasury control from the additional chief secretary (finance), obtained by TOI, has been circulated to all treasury officers.

The Centre allowed the state government to borrow an additional Rs 4,200 crore for Onam expenses, out of the total borrowing limit of Rs 37,512 crore for the current financial year. As of early September, Rs 21,253 crore had already been borrowed, with the remaining balance to be borrowed between January and March of next year. The government requested to borrow Rs 5,000 crore specifically for Onam, and the Centre granted permission to borrow Rs 4,200 crore for this purpose.

Amidst deepening financial challenges, the state finance department is grappling with how to manage salary, pension payments, and clearing pending bills and arrears. Recognizing its inability to fulfill commitments in the State Plan for the current financial year, the state government is streamlining the Plan by focusing only on essential projects. This will result in significant cuts to the Plan for the year, for which a cabinet sub-committee has been formed and the proposal has been approved by the cabinet.Submit the Plan expenditure.