Kerala and Punjab will jointly urge the Centre to restore the 0.5% additional borrowing limit tied to power sector reforms.
Kerala Chief Minister V.D. Satheesan and Punjab Finance Minister Harpal Singh Cheema discussed strengthening state financial cooperation and joint advocacy during their recent meeting.
Both states raised serious concerns over adjustments in GSDP calculations by the central government, noting their detrimental impact on state borrowing capacities.
Kerala Chief Minster V D Satheesan on Wednesday met Punjab Finance Minister Harpal Singh Cheema here and said they will jointly urge the Centre to restore the withheld borrowing limit linked to power sector reforms.
Satheesan, in a post on X, said that he and Cheema discussed avenues for cooperation and agreed to jointly press the Union Government to restore the withheld 0.5 per cent borrowing limit linked to power sector reforms.
Based on the 15th Finance Commission's recommendations, the Centre provided state governments with additional borrowing space of up to 0.5 per cent of Gross State Domestic Product (GSDP) annually for four years from 2021–22 to 2024–25.
The 16th Finance Commission did not recommend continuing this extra borrowing facility beyond the initial award period, and the central government accepted that recommendation.
The CM also said that Punjab's interest in studying the successful Kerala Lottery model was discussed in the meeting.
"Furthermore, sought the collective intervention of states, including Punjab, against the Centre's changes in GSDP calculation, which severely impacts state finances," he said, sharing photos of the meeting.
The CM was referring to the decision taken in May this year by the Union Ministry of Statistics and Programme Implementation (MoSPI) to overhaul the GSDP calculations across all states, including Keralam, by shifting the base year to 2022–23.
