State to Raise Rs 750 Crore by Selling Securities

7 October 2013
Kochi

The Kerala government will enter the capital market to mop up Rs 750 crore. In its notification, the state finance department said the amount would be raised through the sale of securities of 10-year tenure, commencing from October 9.

The proceeds will be utilised for financing the developmental activities in the state. The Reserve Bank of India will sell the securities through auction tomorrow. The cut-off yield determined at the auction will be the coupon rate and the interest will be paid twice in a year, it stated. The move comes as the state has been facing a drop in tax revenue collection in the last three months.

Due to weak financials, the state government has asked Centre to raise the limit for taking loans from the current 3 per cent of the GDP to 4 per cent. The finance department has already directed to control the expenses of various departments and instructed not to create fresh posts and also to regulate fresh appointments. Various departments had created around 15,000 new posts in last two years.

Senior officials of the finance made a presentation on the state’s current financial situation before the Cabinet recently. The Cabinet asked the chief secretary to discuss revenue generating measures with various department heads and submit a report next week. The measures would be announced after the next Cabinet meeting, scheduled on October 10.

At his post Cabinet briefing recently, Chief minister Oommen Chandy said: “We wish to increase revenues without taxing the people. There will be no cut in the Plan expenditure. But certain measures will have to be taken to cut non-plan expenditure. The UDF government after coming to power, had created 15,000 posts involving a financial commitment of Rs 460 crore.However, there will not be a ban on recruitment.”

Source– business-standard.com

Found Useful? Do Share: State to Raise Rs 750 Crore by Selling Securities: