In the wake of catastrophic floods, the state has formally requested the Centre to increase the external borrowing limit to 4.5% of gross state domestic product (GSDP) from the present limit of 3% but, given the precedent, realistically expects a mere 0.5% increase. Top official sources indicated that even this notional increase would translate to Rs 6,000 crore of loans. “The Centre has not given any such (4.5% of GSDP) concession to any other state before. Even if they do, it may be a marginal 0.5% increase, which can come to an additional 6,000 crore,” a top government official involved in the process told TOI on condition of anonymity.
Keeping this in mind, the state government has decided to explore possibilities for seeking loans from multi-lateral agencies including World Bank, Asian Development Bank and International Financial Corporation. A World Bank team led by its country director will visit the state on Wednesday and hold discussions here with chief minister Pinarayi Vijayan, chief secretary Tom Jose and principal secretary (finance) Manoj Joshi.
State government to submit final report tomorrow
According to sources, the WB team is here to initiate standard procedure followed for providing assistance that will begin with a detailed assessment of losses.
It is reliably learnt that preparation of the final report on losses resulting from the floods is underway, and will be submitted to the Centre after Thursday, when the chief minister is likely to place a detailed report in the assembly.
The state’s preliminary estimation of losses was Rs 19,512 crore, which is likely to be revised to around Rs 25,000 crore in the final estimation, sources said. One-fourth of this sum can come from World Bank assistance, if everything goes as anticipated and the bank decides to give assistance to the state, sources added. The bank is already assisting the state for two major projects -- Kerala State Transport Project and Jalanidhi.
Meanwhile, efforts are on to cajole major banking and financial institutions to offer whatever support they can. A team of finance ministry officials led by Union minister of state for finance Pon Radhakrishnan will be in the capital on Wednesday to attend the meeting of state level bankers’ committee (SLBC) that would discuss the provision for providing more loans without much legal complications to small and medium traders and business houses who have suffered losses due to the floods. In the meeting, to be chaired by the Union minister, state finance minister T M Thomas Isaac is likely to ask insurance companies to honour insurance claims of those affected by the flood without the usual stringent norms, as many of them had even lost the papers normally required for claiming insurance cover.
from Times of India https://ift.tt/2PMqHqV
