The Finance Department in Kerala has instructed all government departments to control spending while preparing Budget Estimates for the upcoming financial year. Departments are advised to avoid increasing expenditure and to ensure that revised estimates do not surpass the original budget allocations. Projects lacking significant economic benefits should be avoided, and non-essential repair and maintenance works should be postponed. Additionally, departments are required to present realistic salary estimates and justify any expenses exceeding the previous year’s levels.
The circular emphasizes that surplus employees should not be laid off but can be reassigned to fill vacant positions. Non-plan expenditure, excluding salaries, should not exceed the previous year’s levels. Department heads are tasked with carefully evaluating all schemes before incorporating them into the Budget. The directive also calls for a reassessment of the necessity of retaining temporary employees and requests information on outstanding tax and non-tax arrears, along with steps taken for recovery.
Despite an increase in revenue receipts during the first quarter of the current financial year, Kerala’s financial situation remains strained due to rising expenditures and borrowings. This financial pressure is also impacting local bodies, as highlighted by Thiruvananthapuram Corporation Mayor V.V. Rajesh, who recently discussed the city’s financial challenges with Chief Minister V.D. Satheesan. Rajesh highlighted a significant shortfall in the Corporation’s budget, emphasizing the need for urgent attention to address the financial constraints.
Mayor Rajesh, who made history as Kerala’s first BJP Mayor in December, raised concerns over reduced plan allocations by the previous and current governments, leading to a substantial deficit for the Corporation. The State’s financial challenges were further underscored by the release of a White Paper by the Satheesan government, revealing outstanding liabilities exceeding Rs 5 lakh crore. This disclosure sheds light on the significant fiscal hurdles facing the new administration in Kerala.
