Kerala Finance Minister KN Balagopal on Thursday met Union Finance Minister Nirmala Sitharaman and made various demands, including a special package and allowing higher borrowings for the state.

A detailed memorandum about the state's demands was submitted to Ms Sitharaman.

In the memorandum, he said that Kerala is on the path of fiscal consolidation but is facing a serious financial crunch due to the scarcity in central transfers and borrowing constraints.

Talking to reporters after the meeting, Mr Balagopal said it was a courtesy meeting after Sitharaman took charge as the finance minister post elections.

According to him, Kerala has a very good record of fiscal consolidation.

The state has demanded a special package of at least Rs 24,000 crore in the Union Budget 2024-25 to tide over the current liquidity stress by scheduling it over a period of two years from 2024-25.

Another demand is for special assistance for the Vizhinjam International SeaPort Ltd (VISL).

"Apart from direct investment from the Union government, we urgently need a special capital investment support of Rs 5,000 crore to fulfil our obligations in developing the Vizhinjam port region. We also request another Rs 5,000 crore to finance certain other infrastructure projects, such as the 'Tunnel Road link between Calicut and Wayanad'," the memorandum said.

As per the memorandum, the state will lose about Rs 4,710 crore in this and next financial year and this is due to the introduction of a new measure by the central government in retrospective effect to cut the borrowing limits of KIIFB and pension company.

"We have requested several times to reconsider this and stop cutting this amount from the borrowing limit at least for this financial year and the next financial year. Hence, permission may be granted to borrow Rs 4,710 crore each during the current financial year and the next financial year over and above the borrowing ceiling being fixed for these two years," the memorandum said.

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