NH works: Kerala to lose Rs 1,475 cr if it okays Centre's proposal, Vijayan-Gadkari meet on Friday

Thiruvananthapuram: The Kerala government will incur a loss of Rs 1,475 crores if it decides to give up on its share of GST and royalties on the construction materials for the two new national highways in the state.

Earlier, the Centre had asked the state to waive off its share of GST and royalties in order to expedite the construction of the Ernakulam bypass and Kollam-Shenkottai road. However, the state, which is under extreme financial stress, has apparently informed the NHAI (National Highway Authority of India) of its difficulty in compromising the GST and royalties.

A final decision regarding the same will be taken in a meeting between Kerala CM Pinarayi Vijayan and Union Minister Nitin Gadkari on August 4. It is also known that the Union minister is extremely pleased with the fast-paced developments of NH-66 and has apparently thanked Pinarayi for the state’s commendable efforts. Kerala is expecting more relaxations from the state government for future road development projects.

However, if left with no other options, Kerala may oblige to the Centre’s proposal.

Kerala in need of Rs 6,508 crores

In total, Kerala has to spend a whopping Rs 12,089 crores for the development of the national highway. Out of this, the fund for the development of NH 66 has been already handed over. Kerala, which is going through a financial crisis now, has to churn out another Rs 6,508 crores for the construction of new roads.

Since loans availed from KIIFB now come under the loan limit for the state, availing further loans for the construction of national highways is nearly impossible. Kerala is expecting the Centre to understand its precarious position.