It is not often that Indian chief ministers engage western Left wing leaders on how to grow their state, but that seems to be exactly what Kerala’s communist chief minister Pinarayi Vijayan is doing.
Vijayan, who is set to visit the London Stock Exchange next week, has invited Jeremy Corbyn, the veteran Left wing leader of the UK opposition Labour Party, to launch the state’s offshore chit fund in Europe.
The chit funds are the latest in a series of measures taken by India’s only communist government to attract funds, working the market for capital expenditure back home.
Vijayan will fly to Europe for a two-week tour starting 8 May and attend the listing of another major financial instrument in London Stock Exchange on 17 May, a masala bond from the state-backed Kerala Infrastructure Investment Fund Board (KIIFB).
It will make Kerala, which is strapped for cash for funding development projects, the only Indian state to issue the rupee-denominated offshore bond and thus circumvent restrictions on borrowing.
“We will also try for Picketty (Left-wing French economist Thomas Piketty, who won global acclaim for a grand theory of economic history). We are trying to get Corbyn for the launch of ‘Pravasi chitty’ (chit funds). That will be in the afternoon of 17 May. Very prominent academics will be attending the launch, which will open the chit funds for Europe sector," Kerala’s finance minister Thomas Isaac, the brain behind such schemes, said over phone.
Vijayan launched the pilot phase of the chit fund scheme in June 2018 in the United Arab Emirates, a favourite destination of non- resident Malayalees, to raise ₹10,000 crore in two years.
The money is meant to finance their hallmark policy initiatives such as building wide roads and establishing better public schools, and hospitals, which is a priority as the state suffered one of its worst floods in 2018.
The state got 125,000 leads for the fund within a fortnight of the launch. This year, Isaac said, the state wants to raise ₹25,000 crore by expanding the scheme to other markets.
The scheme is primarily aimed at Kerala expatriates, who form almost 10% of the state’s 30 million population and send home more than ₹1 trillion every year. At 8-18% return offerings, the chits are also sweetened with life-term insurance cover, pension, and other benefits.