Thiruvananthapuram:Ahead of the upcoming elections, the state govt has begun taking urgent steps to consolidate its finances, unlock idle funds and create fiscal headroom before the model code of conduct (MCC) comes into force.During a recent high-level financial review chaired by the chief secretary, officials found that nearly Rs 120 crore was lying unused in various bank accounts because the electronic Know Your Customer (e-KYC) process of several heads of departments had not been completed. Departments were therefore instructed to complete e-KYC immediately so that these funds can be utilised before the accounts become inactive.The review also identified funds earmarked for land acquisition that were parked in separate accounts by district collectors. Officials suggested that temporarily transferring these balances to the state treasury for a few months could improve the govt’s liquidity during the next two months. “These measures are part of a last-ditch effort to consolidate scattered balances into the treasury system and optimise short-term cash flow, so that the state’s already critical financial position does not slip into a deeper crisis,” one of the dept secretaries, who was part of the meeting, said.Borrowing space also came under scrutiny. Departments and special purpose vehicles (SPVs) were asked to immediately execute and forward all pending agreements relating to borrowings from the Kerala Infrastructure Investment Fund Board (KIIFB). The instruction said “all pending agreements to be executed by departments/SPVs in respect of borrowings from KIIFB shall be signed and forwarded to the finance department immediately.“The finance department clarified that wherever agreements between KIIFB and SPVs are formally in place, the corresponding liabilities, being serviced entirely by the SPVs, can be excluded from the state’s borrowing limits, as they do not constitute direct govt liability. It was observed that in some cases repayments had already begun, but the executed agreements were not yet forwarded to the finance department. “Without these documents and subsequent certification by the accountant general, the amounts cannot be excluded from the state’s borrowing ceiling. SPVs, including entities such as KSEB, were asked to urgently submit the executed agreements so that eligible borrowings can be kept outside the State’s fiscal limits,” a senior official with the finance (resources) department said on condition of anonymity.Public sector undertakings were also reminded to promptly remit dividends owed to the govt, reinforcing the broader effort to strengthen cash inflows. Additionally, departments were warned that failure to onboard schemes on the centrally monitored SNA-SAPRSH platform could result in delays or stoppage of Central funds.Finally, all departments were instructed to issue administrative sanctions for projects planned in March and April before the MCC comes into effect, ensuring that critical works can proceed without disruption during the election period.
