Rebuilding Kerala: Is Centre doing enough?
Thiruvananthapuram: The doors for funds to rebuild Kerala after the devastating floods are closing fast with the central government lagging behind on decisions.
Kerala will not be allowed to avail more loans, central government had informed the state finance department principal secretary. The centre is yet to take a decision on Kerala’s request of Rs 4,790 crore relief from the National Disaster Mitigation Fund (NDMF). It remains to be seen if the centre would consider levying additional cess on GST.
Both the World Bank and the United Nations estimate that Kerala would need Rs 30,000 crore to rebuild itself. Kerala would get loans to the tune of Rs 10,500 crore if the cap on foreign loans is extended. Further, the state is expecting Rs 1,000 crore through additional cess on GST and Rs 4,700 crore as disaster relief fund from centre.
The uncertainity is a major setback for Kerala which needs centre’s help to secure funds to the tune of Rs 16,000 crore. “The centre is restraining Kerala over political motives,” alleged State finance minster Dr Thomas Isaac.
For Kerala, the only favourable action from the central government have been the ongoing discussions to provide more funds for department-level projects that make use of central budget and the in-principal agreement to avail world bank loans.
Requested Rs 4,700 crore, received Rs 600 crore
So far, the central government has provided only Rs 600 crore to Kerala as flood relief. The Prime Minister had promised to provide more funds if requested. Following this, the state government had approached the central government in September seeking Rs 4796 crore. It is learned that the central team, which came to the state and reviewed the damages, had recommended to provide flood relief of Rs 2,600 crore. However, the centre is yet to decide on this.
“We expected to avail Rs 7200 crore as loan from the World Bank, but were offered only Rs 3,800 crore. The World Bank may provide more loans if we can make the projects more attractive. However, it would be difficult to avail these loans if the central government does not extend the limit,” Isaac added.
The Central government which refrained state ministers from going abroad seeking funds has reduced the donations to the chief minister’s disaster relief fund.
Good response to CM’s disaster relief fund
Despite the centre not allowing state ministers to visit abroad, the chief minister’s disaster relief fund received funds to the tune of Rs 2,700 crore exceeding expectations of securing Rs 1,500 crore.
Cold response for crowd funding
However, the crowd funding portal, developed by Kerala government with the help of KPMG, received nominal inflow of funds. Incomplete data collection and lack of publicity did not help the cause.
Departmental discussions in progress
The central government has added 50 additional days to the Rural Employment Guarantee scheme. Kerala is expecting Rs 2,500 crore from NABARD Infrastructure Development Fund, Rs 400 core from Rural Infrastructure Development Fund and Rs 1,300 crore from HUDCO. However, the central and state governments are still discussing these projects.
“The central government had promised significant support to the state government. It is learned that the centre is yet to decide on the relief amount, which remains at Rs 600 crore. This is a serious situation,” chief minister Pinarayi Vijayan said.