In Thiruvananthapuram, the state government has implemented stricter controls on treasury payments by reducing the maximum limit for bill clearances without restrictions from Rs 25 lakh to Rs 5 lakh. This new restriction also affects local bodies, meaning their payments will now be subject to the same limits. Bills exceeding Rs 5 lakh will now require approval from the finance department before being cleared, potentially causing delays in the administration process. A communication on this change in treasury control, issued by the additional chief secretary (finance) and accessed by TOI, has been sent to all treasury officers.

The Central government has allowed the state government to borrow an extra Rs 4,200 crores for Onam expenses, as part of the total borrowing limit of Rs 37,512 crores for the financial year. By early September, Rs 21,253 crores had already been borrowed, and the remaining amount is scheduled to be borrowed between January and March of the following year. However, due to the financial strain caused by Onam expenses, the state government requested permission to borrow an additional Rs 5,000 crores from this allocation. The Central government approved a borrowing of Rs 4,200 crores in response to this request.

Facing a worsening financial crisis, the state finance department is now grappling with the challenge of meeting payroll, pension obligations, and outstanding bills and dues. Recognizing the inability to fulfill commitments under the State Plan for the current financial year, the state government has taken measures to reduce the Plan to only essential projects. This decision will lead to significant cuts in the ongoing year’s State Plan. To address this, a cabinet sub-committee has been formed and the proposal to resize the State Plan has been approved by the cabinet.Implement the planned expenditure.