The final tranche of the stimulus package announced by Union Finance Minister Nirmala Sitharaman on Sunday has turned out to be a mixed bag for the State.
While agreeing to the demand to raise the ceiling for annual borrowing to 5% of the Gross State Domestic Product (GSDP), the strings attached to the borrowings have come as thorn in the flesh, especially for Kerala that first flagged the demand and then mobilised non-BJP ruled States to mount pressure on the Centre.
As per the preliminary estimates, the State has the leeway to borrow ₹18,100 core more this year, but the income loss has been estimated at ₹35,000 crore. Still it could be deemed as a breather for the State that is reeling under acute funds crunch.
The conditions such as one nation one ration card, promotion of ease of doing business and enhancing the resources of urban local bodies would not lead to any Centre-State friction, but the undue thrust laid on privatisation of public sector undertakings and power sector reforms that may eventually ring the death knell of Kerala State Electricity Board (KSEB) and its robust transmission and distribution mechanism would not be palatable to the State.
Kerala was one State that had set a trend in the country by expressing its resolve to take over and operate Central PSUs that were facing the threat of execution. Starting with the takeover of Instrumentation Limited at Kanjikode, the State had expressed its willingness to take over Hindustan Newsprint Limited and even the Thiruvananthapuram International airport when the Centre decided to hand it over to private players.
This trend had prompted employees of HLL Lifecare Limited to coax the State government to bid for the company which has also been listed for disinvestment by the NITI Ayog. The Centre’s idea to open the mining sector too may not be welcomed by the State that has refused to grant private participation for mineral sand-mining.
The State may not go on a collision course with the Centre, instead open a vestibule for parleys to wrest maximum aid to tide over the COVID-19-induced crisis and bail the government out of the current fiscal stress, sources said.
