Finance minister of Kerala KN Balagopal defended the state's financial position saying it was not under stress.
The minister asserted that the state's debt level in comparison to its own GDP is below the permissible limit.
"We are borrowing money following the central government's rule," Balagopal said.
Notably, the Reserve Bank of India in a report titled 'State Finances: A Risk Analysis' said states' fiscal positions deteriorated sharply in 2020 with a sharp decline in revenue, an increase in spending and a sharp rise in debt to GSDP ratios.
Based on the debt to GSDP ratio in 2020-21, the RBI found the debt burden in 10 states including Kerala quite high. These 10 states, the report said, accounted for around half of the total expenditure by all state governments in India.
Kerala's debt during the financial year 2021-22 was estimated to be at 37 per cent and is expected to be 37.2 per cent during the current financial year, data showed.
"Moreover, the interest payment to revenue receipts ratio, a measure of debt servicing burden on states' revenues, in 8 of these states was more than 10 per cent," the RBI report had said in July.
Balagopal, however, defended his state by saying there were no "lapses in finance management."
Further, he complained that the Centre had taken powers of the states to collect taxes.
"As part of GST, the central government has taken all powers to collect taxes from state governments and also decreased the states' share. The state lost a minimum of Rs 12,000 crores," the minister claimed.
"In my opinion, the ruling party and the opposition party should unite together above politics to start a protest against central government to change central government's financial policy," the minister said in the state Assembly.
( With inputs from ANI )
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