Central loan for Wayanad rehab: Conditions are scary, a cruel joke, says minister

Thrissur/Wayanad, Kerala: Kerala Revenue Minister K Rajan on Saturday said that the loan of Rs 529.50 crore sanctioned by the Centre for Wayanad rehabilitation carries conditions which were "scary" and a "cruel joke".

The minister said that it indicates that there is no change in the stance of the central government towards the landslide victims in Wayanad and Kerala.

Speaking to reporters here, Rajan said that instead of giving unconditional financial assistance rightfully deserved by Kerala, the Centre only gave a loan with stringent conditions, including utilisation of the entire amount by March 31.

"The conditions which are part of the loan are scary. Directing the state to utilise the entire amount within the next 45 days, by March 31, is a cruel joke," the minister said.

Meanwhile, speaking to a TV channel in Wayanad, some of the disaster affected persons said they were disappointed by the development and said that the Centre and the state were throwing them like a ball from one court to another.

"We had great hopes when the Prime Minister came here and promised all help for the rehabilitation work. But only a loan has been given to the state by the central government. We have no other option but to hold protests and agitations," they said.

On Friday, state Finance Minister K N Balagopal had termed the stipulation, to utilise the amount by March 31, as a "huge practical problem." The conditions attached to the loan under the Centre's 'Scheme for Special Assistance to States for Capital Investment 2024-25', also require that the released amount be forwarded to the implementing agencies within 10 working days.

If there is any delay beyond that period, the state will be liable to pay interest to the Centre on the amount released, as per the weighted interest rate on open market borrowings for the previous year, it said.

Balagopal had said that despite the conditions attached to the loan, the state will proceed with the rehabilitation work and will convey to the Central government the practical difficulties of utilising such a large amount within a short timeframe by March 31.

Leader of Opposition in the Assembly V D Satheesan too had criticised the Centre' decision, by saying that the condition to utilise the loan amount by March 31 was "impractical." He had said that by providing a 50-year interest-free loan for 16 projects, which must be utilised by March 31, the Central government was "trying to suffocate Kerala while pretending to help it." The other conditions attached to the loan include ensuring that funds are not parked and avoiding duplication of funding for capital projects approved under the scheme.

Additionally, the state must also seek the Centre's approval for any unavoidable changes to the specific projects for which the loan has been sanctioned, state government sources had said.

They had also said that the Centre stated that using the loaned amount for any purpose other than its intended use would result in a deduction from the state's tax devolution in subsequent periods.

The loan was sanctioned following severe criticism of the Centre by the LDF and UDF in Kerala over the non-grant of financial assistance for the rehabilitation of disaster-hit areas in Wayanad.

Over 200 lives were lost in landslides that wiped out three villages in the high-range district in July last year.