Thiruvananthapuram: The state government has tightened treasury control by lowering the limit for bill clearance without restrictions from Rs 25 lakh to Rs 5 lakh. This change will also affect local bodies, as they will now require approval from the finance department to clear bills exceeding Rs 5 lakh. The decision could potentially cause delays in bill processing, leading to disruptions in state administration. A letter outlining the new treasury control guidelines from the additional chief secretary (finance) has been circulated to all treasury officers.

The Centre has approved the state government's request to borrow an additional Rs 4,200 crore for Onam expenses, out of the total permissible borrowing of Rs 37,512 crore for the current financial year. The state had already borrowed Rs 21,253 crore by the first week of September, and the remaining amount is to be borrowed between January and March of the following year. Given the financial strain, the government sought permission to borrow Rs 5,000 crore specifically for Onam costs, prompting the Centre's approval of Rs 4,200 crore.

The state finance department is now faced with challenges in meeting financial obligations such as salaries, pensions, pending bills, and arrears. To address the financial crisis, the government is contemplating measures to resize the State Plan for the current financial year to prioritize essential projects. A cabinet sub-committee has been formed to oversee this process, with the cabinet approving the proposal for Plan reduction.Submit the Plan expenditure.