Thiruvananthapuram: The state government announced stricter controls on treasury disbursements, reducing the limit for bills to be cleared without restrictions from Rs 25 lakh to Rs 5 lakh. This new restriction now applies to local bodies as well, meaning that payments for local bodies will also be impacted. Under the new rules, any bills exceeding Rs 5 lakh will require approval from the finance department before being cleared from the treasury. This could potentially cause delays in the administration process, affecting even small bill payments. The additional chief secretary (finance) issued a letter on treasury control, which has been circulated to all treasury officers.

The Centre approved the state government's request to borrow an additional Rs 4,200 crore for Onam expenses, out of the total borrowing limit of Rs 37,512 crore for the fiscal year. By early September, Rs 21,253 crore had already been borrowed, with the remaining amount to be borrowed between January and March of the following year, the final quarter of the fiscal year. Due to the high expenses associated with Onam, the state sought permission to borrow an additional Rs 5,000 crore from the remaining amount, and the Centre approved borrowing Rs 4,200 crore for this purpose.

Facing a deepening financial crisis, the state finance department is now grappling with challenges to meet obligations such as salaries, pensions, pending bills, and arrears. To address this, the state government has decided to scale down the State Plan for the fiscal year, focusing only on essential projects. A cabinet sub-committee has been formed to oversee the significant reduction in the State Plan, with the cabinet approving the proposal.Submit the Plan expenditure.