Kerala announces ₹5,650-crore package to tide over COVID crisis

Kerala Finance Minister K.N. Balagopal  

The Kerala government has come out with a ₹5,650 crore package for helping out small traders, industries and farmers hit hard by the COVID 19-induced economic crisis. Finance Minister K.N. Balagopal announced the ‘supplementary package’ in the State Legislative Assembly on Friday.

A ₹2,000-crore interest subsidy scheme for loans taken from Central and State financial institutions, cooperative sector institutions and commercial banks forms the major component of the package.

Rent, fixed power charge waived

Under the interest subsidy scheme, the State government will bear up to 4% of the interest on loans of ₹2 lakh or below. This benefit will be applicable to loans taken from August 1 for a period of six months. Mr. Balagopal said the scheme will benefit around one lakh people. Further, the rent on government space let out to shops has been waived till December 31. For providing a breather to MSMEs, the government has also waived building tax, rent and the fixed charge on electricity connection for the period from July to December.

Interest on chit fund dues

Other components of the special package include schemes implemented by the Kerala Financial Corporation (KFC) and the Kerala State Financial Enterprises Ltd (KSFE), Mr. Balagopal said.

The KSFE will waive the penal interest on all defaulted loans dating from January 20, 2021, till September 30. Further, 50% to 100% of the interest and the penal interest on chit fund dues will be waived till September 30. The term of the loan scheme for families affected by COVID-19 — up to ₹1 lakh at 5% interest — also has been extended till September 30.

KFC schemes

As part of the package, the KFC has announced three schemes for giving a leg-up to industries. These are in addition to various schemes announced in July, Mr. Balagopal said.

First is the ‘Startup Kerala’ scheme which offers loans up to ₹1 crore without collateral security. The KFC will earmark ₹50 crore for this initiative. The second one is a ₹500-crore special loan scheme for units in the different industrial estates. Up to ₹20 crore will be sanctioned for a unit under it.

Loans for industrial units

The third scheme is the restructured Chief Minister’s Entrepreneurship Development Programme. Loans up to ₹1 crore at 5% interest will be sanctioned under this scheme. The aim is to provide loans to 2,500 industrial units during the next five years at 500 units a year.

In June, the KFC had announced a one-year moratorium on loan repayment to help MSMEs and healthcare and tourism ventures. Loans would also be restructured as per RBI guidelines. The KFC had also designed a scheme for units manufacturing equipment for combating the pandemic where 90% of the project cost would be provided as loan.

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Printable version | Sep 17, 2021 11:00:47 PM |

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