The State government on Friday sought a ₹2,000-crore special revival package from NABARD to alleviate the growing economic distress caused by the COVID-19 outbreak even as it tightened surveillance and scaled up enforcement of social distancing norms to retard the pace of the contagion.
In a letter, Chief Minister Pinarayi Vijayan asked NABARD Chairman Harsh Kumar Bhanwala to release the special assistance as a low-interest loan from the bank’s Rural Infrastructure Development Fund. He asked for a 2% rate of interest instead of the customary 3.9% for such grants.
The partial lockdown imposed by the government had adversely impacted trade and commerce. Agriculture, tourism, IT, and entertainment sectors seemed to be hit the hardest, raising the spectre of layoffs, wage cuts, diminished public consumption, and economic recession.
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The government was fighting on two fronts. It has outlawed crowds and gatherings that accelerate the people-to-people spread of the contagion.
On Friday, the police issued notices to three places of worship in northern Kerala for allowing large gatherings. Law enforcers also tracked down at least three persons who jumped quarantine and booked them on the charge of endangering public safety.
They also arrested a person for triggering panic buying of fuel and provisions by posting misleading information on social media. The State also moved to facilitate the rapid movement of freight, including perishables from neighbouring States, without loosening internal border disease surveillance.
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On the economic front, the government was scrambling to raise resources to stabilise the State’s tottering economy.
Mr. Vijayan told NABARD that the government intended the banks to reduce the interest burden to give a leg up to the economy.
On March 17, Mr. Vijayan had told the State Level Banking Committee that he wanted banks to slash interest rates to rejuvenate the economy at the grassroots level.
Mr Vijayan said in his letter that NABARD could help the banks in Kerala reduce the cost of lending by “providing enhanced refinance at this time of need”.
He said NABARD needed to ease liquidity, and provide room for an additional cost adjustment to extend concessional loans to borrowers.
It should reduce the interest rate for refinancing loans that cover crop credit from 4.5% to 2%. The interest rate for refinanced loans to small enterprises, handlooms and artisans should be cut from 8.4% to 5%.