Kerala Finance Minister K N Balagopal on December 5 said the state is reeling under an unprecedented financial crisis and attributed the distorted financial policies of the Centre, the outbreak of the COVID-19 pandemic, and recurring natural disasters as reasons for the poor economic condition.

“It is true that the state is facing an unprecedented financial crisis. However, the reasons contributing to the crisis are beyond the control of the state…that is the fact,” the Minister said.

Compared to the previous financial year, there was a dip of Rs 6716 crore in the revenue deficit grant (released to the state by the Centre) during the ongoing financial year, the Minister said in the House.

Natural disasters, the COVID-19 pandemic, distorted policies of the Centre, the implementation of the GST without much contemplation, delayed distribution of GST compensation, and imposition of cuts in the borrowing limit of the state by the union government were among those reasons that triggered the present financial crisis in the southern state, the Minister further said.

The Left government was trying to overcome the crisis through strict financial discipline by strengthening tax collection, avoiding unwanted expenses, and keeping it to the minimum, the minister added.