After Announcing Rs 20,000 Crore Relief Package To Overcome Coronavirus Effects, Kerala CM Seeks Rs 2,000 Crore From NABARD

After Announcing Rs 20,000 Crore Relief Package To Overcome Coronavirus Effects, Kerala CM Seeks Rs 2,000 Crore From NABARD

by M R Subramani - Mar 23, 2020 11:47 AM +05:30 IST
After Announcing Rs 20,000 Crore Relief Package To Overcome Coronavirus Effects, Kerala CM Seeks Rs 2,000 Crore From NABARDKerala CM Pinarayi Vijayan
  • While CM Pinarayi Vijayan has urged NABARD to reduce its lending rate to rural banks, his government has not come clean on how it will raise the promised Rs 20,000 crore.

    Kerala has worked up a debt of Rs 2.5 lakh crore thus far.

Kerala Chief Minister Pinarayi Vijayan has written to the National Bank for Agricultural and Rural Development (NABARD) seeking a special package for the states to help them recover from the effects of Coronavirus (Covid-19).

In a letter to NABARD Chairman Dr Harsh Kumar Bhanwala, Vijayan, who heads the Left Democratic Front (LDF) government led by his Communist Party of India-Marxist (CPM), sought a special line of credit to the tune of Rs 2,000 crore for Kerala.

Vijayan said NABARD should take proactive measures to help the states, including Kerala, through a special revival package as the spread of the pandemic virus was affecting the economy.

He also urged the bank to reduce the interest extended to state cooperative banks, regional rural banks and commercial banks from 4.5 per cent per annum to two per cent annum.

This will help these banks provide crop loans to farmers at a lower interest rate.

Vijayan’s letter to NABARD comes on the heels of his announcement of a Rs 20,000 crore relief package to help revive the state's economy affected by the outbreak of Covid-19 pandemic.

The Kerala government’s relief package is aimed at reviving demand with Rs 2,000 crore being disbursed as consumer loans.

It will also spend Rs 2,000 crore — Rs 1,000 crore each in April and May — of the relief package for the rural employment Mahatma Gandhi National Rural Employment Guarantee Scheme.

Besides, the state government will distribute two months’ social security pension for April and May at one go, totalling Rs 1,320 crore.

While announcing the relief package, the LDF government did not provide details of how it will raise the resources.

Kerala Finance Minister Thomas Isaac, in his Facebook posting, said the state would mobilise its own resources. He said the loans scheduled to be distributed during the entire 2020-21 fiscal under various welfare schemes would be given at the start in April and May.

This would ensure a healthy cash flow in the state’s economy, he wrote.

Kerala has run up a public debt of Rs 2.5 lakh crore so far and the State Finance Department has imposed restrictions on the treasury in clearing pending bills in view of the precarious financial situation.

With 15 persons testing positive for the pandemic virus on Sunday (23 March), a total of 67 persons have been affected by the outbreak till now.

Nearly 60,000 persons are under surveillance by the state government for symptoms of the pandemic with about 59,000 of them under home quarantine.

M.R. Subramani is Executive Editor, Swarajya. He tweets @mrsubramani

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