After Being Taken For A Ride On Foreign Aid, Kerala Now Seeks Foreign Loans

After being blown away by the foreign aid row, Kerala Government has now decided to take refuge in foreign loans.

The state is looking to avail soft loans from major international financial institutions and, crucially, hoping that the central government would at least marginally raise the permitted limit for external borrowings reports The Times of India.

Earlier the state had formally requested the Centre to increase the external borrowing limit to 4.5 per cent of gross state domestic product (GSDP) from the present limit of 3 per cent but, given the precedent, realistically expects a mere 0.5 per cent increase.

The state government has decided to explore possibilities for seeking loans from multi-lateral agencies including World Bank, Asian Development Bank and International Financial Corporation after the UAE denied having made any formal offer for financial assistance.

According to TOI, a World Bank team is in Kerala to initiate standard procedure followed for providing assistance that will begin with an assessment of losses.