Kerala seeks loan waiver worth Rs.2,298 crore

July 25, 2014 02:52 am | Updated 02:52 am IST - Thiruvananthapuram

Chief Minister Oommen Chandy arriving to meet leaders at the Parliament House in New Delhi on Thursday. Photo: R.V. Moorthy

Chief Minister Oommen Chandy arriving to meet leaders at the Parliament House in New Delhi on Thursday. Photo: R.V. Moorthy

Chief Minister Oommen Chandy on Thursday met Union Finance Minister Arun Jaitley and sought a waiver of consolidated loan outstanding worth Rs.2,298 crore to help the State get over its present financial crunch and achieve the goals of fiscal consolidation.

Mr. Chandy, who is Delhi to lobby for several Kerala issues, said the Finance Ministry had earlier identified Kerala, Punjab, and West Bengal as debt-stressed States. A committee, referred to as the KPW Committee, had been appointed to suggest ways for improving the fiscal situation of these States.

The committee had met several times, but no decision was taken. The State government had requested for the waiver of the consolidated outstanding as on March 31, 2011 amounting to Rs.2,924 crore. The State has since repaid a sum of Rs.626 crore, with the outstanding amount being Rs.2,298 crores as on March 31, 2014.

Mr. Chandy stressed on the imperatives of the waiver in the backdrop of the financial crunch the State government was facing on account of implementing the 9th pay and pension revision. The waiver proposal was revived because the NDA government had decided to extend the committee’s term. Mr. Jaitley is understood to have told the Chief Minister that he will examine the issue and take an early decision.

FACT revival With regard to FACT’s revival package, Mr. Chandy gave the Finance Minister a split up of the financial assistance worth Rs.991 crore for the flagship Central PSU as approved by the Board for Restructuring of Public Enterprises and other related Central Ministries. These include infusion of funds in the form of an interest-free loan of Rs.300 crore repayable in 10 years after a moratorium of two years, grant of Rs.250 crore to pay suppliers and LIC (gratuity), waiver of Government of India loans amounting to Rs.282.73 crore and outstanding interest of Rs.159.17 crore as on March 31, 2013.

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