CPI(M) state secretary MV Govindan said the development comes in the wake of Kerala CM Pinarayi Vijayan meeting the World Bank MD.
World Bank sanctions ₹1,228 crore loan for Kerala. (creative Commons)
The World Bank has sanctioned a ₹1,228-crore loan for Kerala in addition to the ₹1,023 crore already received from it by the state, the ruling CPI(M) said on Sunday.
CPI(M) state secretary MV Govindan said the development comes in the wake of Kerala Chief Minister Pinarayi Vijayan’s meeting with Anna Bjerde, the Managing Director (operations) of the World Bank, during his trip to the US.
Speaking to reporters at a press conference in Thiruvananthapuram, Govindan said it was an important development for Kerala as it was one of the states that were facing the most number of natural disasters, had to deal with several communicable diseases, and was significantly affected by climate changes.
The funds would help Kerala tackle such problems effectively, he noted.
After Vijayan met Bjerde, a Chief Minister’s Office (CMO) statement said that the World Bank had assured hi, that it was ready to invest in the state’s basic infrastructure sectors.
During the meeting, the progress of various projects — including the Rebuild Kerala initiative, which is being carried out in collaboration with the World Bank — was also discussed, the statement said.
On 27 May, the Left party said the Union government had reduced the borrowing limit of the state to ₹15,390 crore from the earlier limit of ₹32,442 crore — 3 percent of the GSDP.
Kerala Finance Minister KN Balagopal said in a statement the Union government slashed the borrowing limit to ₹15,390 crore, which was half of what Kerala was entitled to borrow.
“The Union government does not even accept legislation on fiscal responsibilities. It has not yet revealed the reason behind the slashing of the borrowing limit,” the statement said.
In July last year, Balagopal, during a discussion in the Assembly, accused the Union Finance Ministry of landing Kerala in a severe financial crisis by withholding a whopping ₹23,000 crore in resources that was due to the state, while also curbing its fiscal powers.
The Central government, he contended, reduced the revenue deficit grant of the state by about ₹7,000 crore this fiscal.
The end of the GST compensation from July, Balagopal went on, would cost the state another ₹12,000.
And, because of the “off-budget borrowings” made by Kerala, the Union Finance Ministry cut the state’s net borrowing limits by roughly ₹4,000 crore.
With loans and overdrafts worth some ₹3.35 lakh crore, the Pinarayi Vijayan-led government is in deep debt and was failing to find any new source of finances.
According to noted economist Mary George, Kerala’s debt increased 13-fold in the past 25 years.
Moreover, she estimated that this figure would cross ₹4 lakh crore by the time the second Pinarayi Vijayan government completes its term.
(With PTI inputs)
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