Keralam Chief Minister V.D. Satheesan defends State government’s borrowings

Defending the Keralam government’s borrowings in recent months, Chief Minister V.D. Satheesan has said that every government across the world resort to borrowings.Addressing a press conference in Thiruvananthapuram on Wednesday (September 2, 2026), Mr. Satheesan said that the United Democratic Front (UDF) government faces the additional challenge of not getting the Revenue Deficit Grant, which was available till last year.‘Tax devolution not increased’“Last year, the 15th Finance Commission had allocated a Revenue Deficit Grant of ₹55,000 crore to the State government. However, the 16th Finance Commission stopped this. The previous Finance Minister prepared the Budget by taking into account the money from this grant too. The tax devolution from the Union government was also expected to increase, but it has not. The Borrowing limit which was 3.5% of the Gross State Domestic Product (GSDP) has now been reduced to 3%,” he said.Mr. Satheesan said that the government cannot borrow beyond the borrowing limits, but the previous Left Democratic Front (LDF) government had depended on off-Budget borrowings using the Kerala Infrastructure Investment Fund Board (KIIFB). “Because of the previous government’s borrowings, we are saddled with an additional debt of ₹38,000 crore. A good part of the money we spent during Onam was meant to meet the debts caused by the previous government. There has been an increase in tax, but we will not be satisfied with this,” he said.Lauds Civil Supplies CorporationThe Chief Minister said that the government’s aim is to enable the Kerala State Road Transport Corporation (KSRTC) sustain itself independently without any grants from the government. He also lauded the Civil Supplies Corporation for ensuring supply of essential items across the State during Onam.‘No bid to sabotage MDMA case’Mr. Satheesan dismissed Opposition allegations of an attempt to sabotage the MDMA case involving the the Chief Minister’s social media coordinator. “It was following the forensic examination of his phone that a woman was arrested from Gwalior, followed by a Ghana national involved in drug trade. The previous government had given political patronage to drug gangs, while we are taking action against everyone irrespective of their political background. Home Minister Ramesh Chennithala has been leading Operation Toofan effectively,” he said. Published - September 02, 2026 03:43 pm IST