Thiruvananthapuram, Jan 11 (IANS): The customary pre-budget talks called by the Kerala Finance Minister K. N. Balagopal has begun and it comes at a time when coffers of the state government are practically "empty".

Chief Minister Pinarayi Vijayan Centre alleged that the union government's "shoddy" treatment towards Kerala is responsible for state's financial situation.

In December, 2023, the Kerala government had filed a petition in the Supreme Court against the Union government, saying that it has imposed limits on the state's borrowing capacity.

A media critic on condition of anonymity said Kerala is a consumer state largely dependent on the remittances besides support from the Centre.

"More than 80 per cent of the state's revenue is used to pay salaries and pensions and if interest on borrowings are added, then there is very little left. Even though steps are announced to raise revenues, it does not happen as projected. Presently the state is passing through its worst ever financial crunch and hence the only way forward is to tightening the belts, which will affect one and all," said the critic.

The talks that have started between Balagopal and experts besides representatives of various bodies is centering around how to go about it.

Any talks of raising the retirement age of state government employees form 57 is going to come under huge attack as there are more than four million educated unemployed in the state waiting for a job and with the Lok Sabha polls round the corner, the Vijayan government might not attempt this.

Another way to put brakes on the financial crunch is to restrict and regulate the benefits to the more than five lakh state government employees as by now itself six dearness allowance payments are in arrears and hence it remains to be seen if the Vijayan government will rub the state government employees the wrong way.

The Congress-led opposition has been slamming the Vijayan government for not stepping up arrears of tax dues from those who deal in liquor, gold and similar ventures.

All eyes are on Balagopal, the first time legislator turned Finance Minister who will be presenting his fourth budget early next month, on how he will be juggling to meet both ends meet of the appallingly poor finances of the state.