Kerala Finance Minister K N Balagopal on Thursday demanded a moratorium on repayment of loans, especially by small borrowers, amid financial woes caused by the coronavirus pandemic.
Balagopal raised the demand for moratorium as well as immediate payment of GST compensation dues and other issues during his meeting with Union Finance Minister Nirmala Sitharaman in the national capital on Thursday.
Kerala is awaiting clearance of GST compensation dues worth over Rs 4,500 crore by the Union government.
Addressing the media, Balagopal said the Centre should immediately pay the GST (Goods and Services Tax) compensation dues.
"The (financial) crisis the state is facing is very severe," the minister said as he emphasised the need for funds.
The state has also put forward the proposal that GST compensation framework, which is to end in July next year, should be extended for another five years.
He said that many borrowers, including small time traders, are having problems due to the pandemic and are unable to make repayments, adding that many are also facing harassment from entities that extended the loans.
There should be a moratorium on loan repayments at least till December. The Reserve Bank has to take a decision and the demand was put forward during the meeting with the finance minister, Balagopal said.
Among other issues is the demand for increasing the borrowing limit of the state without any conditions.
The state finance minister also said the approach adopted for devolution of central funds for states was "wrong" and was adversely impacting states.
CPI(M)-led Left Democratic Front (LDF) came back to power in Assembly polls held in the state in April.
In recent weeks, Kerala has been witnessing high number of coronavirus infections.