Kerala's new Finance Minister Thomas Isaac said on Friday that the state is facing a severe economic crisis, much like the fiscal crisis it faced between 1990 and 1993.

He said that there is only Rs 700 crore left in the state treasury and that the state cannot go forward without borrowing.

Reports say that he made the revelation after meeting with finance, expenditure and taxes secretaries at Vizhinjam guest house in Thiruvananthapuram.

"In the present circumstances, it would take at least three years for the financial condition to stabilise," he was quoted as saying.

Isaac clarified that this would not impact the common man and assured that salary, pension, welfare payments would remain unaffected.

In 2011, when the UDF government led by the then Chief Minister Oommen Chandy took office, the state treasury had Rs 2700 crore.