Chief Minister Oommen Chandy announced here on Wednesday that bar licences would henceforth be issued only to five-star hotels.

Mr. Chandy made the announcement after a meeting of the Cabinet. The announcement comes against the background of allegations that some three-star hotels had managed to get licences despite the government decision in December last that fresh licences would be issued only to hotels with a minimum of four-star rating.

The Chief Minister said a negotiation committee had been formed to scrutinise the tender for the Vizhinjam port. The Principal Secretary (Expenditure), Secretary (Ports), Secretary (Law), and the Managing Director of Vizhinjam Seaport Limited would be its members.

Mr. Chandy said the Cabinet had reviewed the progress of Plan implementation in the State: it would be possible to achieve an expenditure of more than 90 per cent in the current year. At the end of February, the Plan expenditure stood at 60 per cent, which was two per cent higher than last year's.


He said the government was continuously monitoring recruitments to government service so that the youth would not suffer on account of the raising of pension age. Necessary orders were being issued in this regard.

The Cabinet decided to raise the assistance under the Swantana scheme for treatment of heart and certain other diseases, funerals, and treatment of accident victims. Accordingly, the assistance for treatment and funeral would go up from Rs.10,000 to Rs.20,000. The aid for purchasing wheelchairs and other equipment for the physically challenged would be increased from Rs.5,000 to Rs.10,000.

The government would suspend revenue recovery on educational loans in view of its decision to subsidise the interest on defaulted loans taken between 2003 and 2009 by persons who could not find employment. Discussions would be held with banks regarding waiving of penal interests. They would be urged to suspend any recovery proceedings pending discussions.

Banks criticised

Mr. Chandy criticised banks for limiting the educational loan to students getting admissions under merit quota and charging high interest rates. The Central directive was that all students joining recognised institutions were eligible for loans up to Rs.4 lakh. The government would take up the matter with the banks.

The moratorium on loans taken by fishermen would be extended up to December this year. The scope of the risk fund set up to cover loans given by cooperatives would be extended to cover default resulting from death or disablement of the debtor. The risk cover would be Rs.1.5 lakh in case of death and Rs.75,000 in case of disablement.

The Urban Development Project would be extended by three years so that works proposed under the project could be completed. The Industries Department would hand over about 30 acres in Palakkad district to the Kerala State Industrial Development Corporation for setting up a light engineering park.

Mr. Chandy said the United Democratic Front was not facing any problem over induction of new Ministers. Constituents of the front were free to state their views and the front arrived at a consensus. The unity of the front would be demonstrated again in the byelection from Neyyattinkara, he added.

The Cabinet congratulated S.P. Muraleedharan who had swam across Palk Strait (between Sri Lanka and Tamil Nadu) and decided to grant him Rs.5 lakh as a token of its appreciation.