Thiruvananthapuram: The state government has decided to tighten control over treasury operations by reducing the maximum limit for bill clearance without restrictions from Rs 25 lakh to Rs 5 lakh. This new restriction also applies to local bodies, meaning that payments by local bodies will be affected as well. Under the new rules, bills exceeding Rs 5 lakh will require approval from the finance department before they can be cleared. This may result in delays in processing payments, potentially causing disruptions in state administration. A letter on treasury control from the additional chief secretary (finance), accessed by TOI, has been sent to all treasury officers.

In response to the state government's request for additional funds for Onam expenses, the Centre has allowed the state to borrow an extra Rs 4,200 crore, bringing the total borrowing limit for the financial year to Rs 37,512 crore. As of the first week of September, Rs 21,253 crore had already been borrowed, with the remaining amount to be borrowed between January and March of the next year, the last quarter of the current financial year. The state sought permission to borrow Rs 5,000 crore specifically for Onam expenses, leading to the Centre's approval of Rs 4,200 crore.

The state finance department is now facing challenges in meeting commitments such as salary and pension payments, as well as clearing a substantial backlog of bills and arrears. Due to the worsening financial crisis, the state government has decided to reduce the State Plan for the current financial year to focus only on essential projects. A cabinet sub-committee has been appointed to oversee the major reduction in the Plan for the year, with the cabinet having already approved the proposal.Submit the planned expenditure.