With just days left before the financial year ends on March 31, Kerala has received approval to borrow an additional ₹6,149 crore. This takes the total borrowing lined up for March 26 to ₹7,139 crore.
The Reserve Bank had earlier announced that Kerala would borrow ₹990 crore on March 26. But late on March 25, a press note revealed the state will raise ₹6,149 crore more through the RBI’s e-Kuber system, which is used for such transactions.
The ₹7,139 crore borrowing is spread across multiple repayment periods. About ₹990 crore will be repaid in 15 months. ₹3,000 crore will take 18 years to return, and the largest chunk — ₹3,149 crore — will be repaid over 30 years.
Kerala is believed to have requested the Centre to allow more borrowing, pointing to reforms in the state’s power sector. The request was to let the state borrow an extra 0.5% of its Gross State Domestic Product (GSDP) under existing policy relaxations.
At the beginning of the year, Kerala had permission to borrow up to ₹37,512 crore. But that target was crossed long ago. By December 2024, the state had already borrowed ₹32,000 crore. An additional ₹4,200 crore was approved for Onam-related spending.
In March alone, the Centre reportedly allowed Kerala to borrow another ₹12,000 crore. The state already borrowed ₹605 crore on March 11 and ₹5,000 crore on March 18. With the fresh ₹7,139 crore, total market borrowing for the year has unofficially hit ₹54,376 crore.
Kerala’s monthly fixed expenses — mainly salaries and pensions — usually need around ₹15,000 crore. But the state earns only about ₹12,000 crore every month. The rest is managed through loans and spending cuts.
March is a different story altogether. With year-end bills and payments piling up, estimates suggest the government may need ₹24,000 crore this month alone. That could explain the sudden rush for more loans.
Last year, Kerala had to go to the Supreme Court to get permission for additional borrowing. This year, the route appears to have been more of a negotiation with the Centre.
