Covid-19: Ease fiscal policy, let states borrow from RBI, says Kerala FM

On Tuesday, Kerala had to offer an interest rate of 8.96 per cent for Rs 6,000 crore market borrowing for state development loan for a 15-year period

As states scramble to raise funds to fight the coronavirus pandemic, Kerala Finance Minister Thomas Isaac has urged the Centre to liberalise its fiscal policy by printing more currency and allowing states to borrow directly from the Reserve Bank.

While expressing optimism that Kerala will get nod for issuance of pandemic bonds, Isaac also warned that the current limitations on the fiscal policy front could push states into a "debt trap".

In a telephonic interview to PTI, Isaac said states should not be forced to go to the capital markets at this time and the Centre should first raise the