₹529.50 crore loan sanctioned for Wayanad rehabilitation
What's the story
The Central government has approved ₹529.50 crore loan to Kerala under the 'Scheme for Special Assistance to States for Capital Investment 2024-25.' The funding is meant for landslide rehabilitation in Wayanad district. However, the funds must be used by March 31, 2025—a condition that has raised concerns among state officials owing to its practical implications.
Loan stipulations
Loan conditions and state's response
The loan conditions require the money to be transferred to implementing agencies within 10 working days of release. Any delay beyond this period would attract interest charges at the previous year's weighted interest rate on open-market borrowings. However, despite these stringent terms, Kerala Finance Minister K N Balagopal has confirmed that the state will go ahead with rehabilitation efforts and inform the Centre of any practical difficulties.
Political backlash
Opposition criticizes Centre's decision
Opposition leader V D Satheesan criticized the Centre's decision, calling it "mocking" the affected in Wayanad. He said Kerala deserved a special package of ₹2,000 crore and accused the Centre of neglecting its constitutional obligations. Satheesan warned of agitation against the Centre's stance if not corrected. By giving a 50-year interest-free loan for 16 projects to be used by March 31, the Central government was "trying to suffocate Kerala while pretending to help it," he said.
Delayed aid
Loan follows criticism over lack of financial assistance
The loan was sanctioned after both the Left Democratic Front (LDF) and United Democratic Front (UDF) parties in Kerala faced severe criticism for not granting financial assistance for Wayanad's disaster-hit areas. The conditions also include avoiding fund parking and duplication of funding for approved projects. Any changes to specific projects require Centre approval and misuse of funds could lead to deductions from future state tax devolution.