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 new restriction also applies to local bodies, impacting their payments as well. Under the updated policy, bills exceeding Rs 5 lakh will require approval from the finance department for clearance. This adjustment may result in delays in bill processing, potentially causing a slowdown in state administration operations. A communication on treasury control from the additional chief secretary (finance), obtained by TOI, has been circulated to all treasury officers.

In response to the financial constraints, the government has been permitted by the Centre to borrow an additional Rs 4,200 crore for Onam expenditures on top of the Rs 37,512 crore borrowing limit set for the fiscal year. By early September, Rs 21,253 crore had already been borrowed, and the remainder is expected to be borrowed between January and March of the following year. This additional borrowing allowance was granted by the Centre specifically to address the financial requirements for Onam.

With the deepening financial crisis, the state finance department is facing challenges in meeting payroll and pension obligations, along with a large backlog of overdue bills and arrears. Recognizing the strain on its budget commitments for the current fiscal year, the state government has opted to downsize the State Plan to focus solely on essential projects. This decision entails significant cuts to the State Plan for the year, prompting the formation of a cabinet sub-committee to oversee the reduction process, which has received cabinet approval.Submit the planned expenditure.