Kerala plans ₹ 3,000 crore World Bank loan for rebuilding2 min read . Updated: 27 Aug 2018, 07:19 AM IST
The Kerala government will soon begin talks with the World Bank for loan, says CM Pinarayi Vijayan
Thiruvananthapuram: Kerala is looking to raise a World Bank loan to rebuild public infrastructure that has been ravaged by the worst floods in over a century, chief minister Pinarayi Vijayan said in an interview. Vijayan did not disclose the amount of money the state plans to raise from the multilateral development bank, but a state government official who is privy to the discussions said that the government is preparing a concept note to raise ₹ 3,000 crore.
“We will discuss with all international agencies including World Bank. With World Bank, we are planning to begin talks. We will start the discussions without much delay. We are still at the phase of recovering from the disaster, that’s why the discussions haven’t started yet. But we will start the talks really soon," Vijayan said.
The Kerala floods have left a trail of destruction. As many as 384 people were killed, a million others were displaced, 50,000 houses turned uninhabitable or were washed away, 80,000km of roads and 39 bridges were lost over the past two weeks because of the floods. The rebuilding exercise is officially estimated to cost the public exchequer about ₹ 20,000 crore.
The talks of an international loan comes at a time when the state is reportedly at odds with the centre for not approving a ₹ 700 crore aid from the United Arab Emirates (UAE) to Kerala.
The Indian government has refused all offers from foreign countries, citing that it will meet the challenge through domestic resources, Mint reported on 22 August. This, along with the Bharatiya Janata Party-led centre’s decision to release ₹ 600 crore against Kerala’s demand of ₹ 2,000 crore as immediate assistance, has cornered the local party unit.
The centre is unlikely to object to the state raising a loan, said the official cited above, requesting anonymity. “We are in touch with the centre, they seem to agree in-principle," he said.
On Sunday, Prime Minister Narendra Modi in a meeting with Kerala governor P. Sathasivam in New Delhi, clarified that the ₹ 600 crore released by the centre is only an advance assistance, according to a statement by the governor.
Modi “assured that additional funds will be released from the National Disaster Response Fund as per laid down procedure," the governor’s statement said.
Taking an international loan at times of crisis is not without precedence in India. Tamil Nadu availed a $100 million loan from World Bank, Asian Development Bank (ADB) and United Nations Development Programme (UNDP) combined, after it was hit by a tsunami in 2005, that caused loss of lives and severe damage to public and private property.
The development also needs to be seen in the background of several international agencies offering to help Kerala. On 22 August, Shashi Tharoor, writer and parliamentarian from Thiruvananthapuram, informally met officials of UN Office for the Coordination of Humanitarian Affairs (OCHA), World Health Organisation (WHO), and International Red Cross, in Geneva, and explored ways to get funding for Kerala’s rebuilding.
Local politicians of Communist Party of India (Marxist), however, have long opposed neoliberal economics and free market policies, and its professed supporters including institutions such as the World Bank.
Earlier, Vijayan’s appointment of Harvard professor Gita Gopinath, who previously worked with World Economic Forum and International Monitory Fund, institutions not known for their support to socialist programmes, had triggered a controversy within the party, although it died soon when the party’s Kerala head, Kodiyeri Balakrishnan, solidly backed Vijayan.