Kerala seeks refund of money spent on NH development or remove curbs on borrowings

Thiruvananthapuram: The Kerala government has approached the union government to either reimburse the amount the state spent on land acquisition for national highway development or remove the ‘unjustified’ restrictions on borrowings.

Kerala has spent Rs 5,580 crore so far out of the allocated 6,769 crore for NH development based on the demand of NHAI to bear 25 per cent of land acquisition charges. This amount was managed through a loan availed by the Kerala Infrastructure Investment Fund Board (KIIFB). However, the union finance ministry later termed the loan of KIIFB, a body corporate under the state government, as the debt of the state. As a result, the union finance ministry made massive cuts to the borrowing limit of Kerala this financial year. This caused serious financial troubles for the state.

In the light of this, state finance department emphasised that the state has incurred a debt of over Rs 13,000 crore due to national highway development. 

Kerala has already agreed to the demand to bear costs for NH development. Also, it argued that the loans of KIIFB cannot be considered as a burden on the state government.

Union transport minister Nitin Gadkari had pledged to exempt Kerala from paying for land acquisition in future projects. Instead, the state would waive royalty on soil and stone and GST on construction materials. However, due to the ongoing crisis, Kerala has not issued a notification implementing these concessions.

Finance minister KN Balagopal criticised the union government, stating that including expenses on national highways within the debt limit is stifling for Kerala. He said that these challenges were communicated to the union finance minister.