Kerala

Kerala seeks moratorium on loans

Kerala Finance Minister K. N. Balagopal  

The State has approached the Centre on the need for moratorium on loan repayment till December 31, 2021, to overcome the economic crisis triggered by the second wave of the pandemic.

The State is also seeking the support of non-BJP-ruled States to fight the Centre’s decision to go for strings-attached loans. While increasing the borrowing limit from 3% to 5% of the Gross State Domestic Product (GSDP), the State had been asked to privatise power distribution.

“The burden of repayment of loans taken by individuals, especially those in the unorganised sector, MSMEs and farmers, is particularly onerous at this time, and these sections need relief by way of moratorium,” Finance Minister K.N. Balagopal pointed out in a letter to Union Finance Minister Nirmala Sitharaman.

The second wave of the pandemic has dealt a ‘ body blow’ on the economy that has been under considerable stress since 2018 due to successive natural disasters. The COVID-19 outbreak and second wave have further exacerbated the stress.

Mr. Balagopal said the impact of the lockdown had adversely affected the economic and social well-being of all sectors, especially employees in the informal sector, agriculture, tourism, hospitality and MSMEs.

“The State government took all possible steps to ameliorate the hardships faced by the people, especially the vulnerable sections,” Mr. Balagopal said.

The Finance Minister, in another letter, made the State’s stance clear on the privatisation of power supply saying it was ‘not practical.’

The State had no objection to some of the proposals, including that of the loan amount being used for capital investment. However, the State cannot accept the proposal to take over the responsibility of the power supply companies, privatise supply companies and provide subsidies directly to the consumers.


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Printable version | Aug 2, 2021 4:55:03 AM | https://www.thehindu.com/news/national/kerala/state-seeks-moratorium-on-loans/article34860531.ece

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