The World Bank and the Asian Development Bank have expressed readiness to provide loan assistance to Kerala in its post-flood reconstruction.
After holding meetings with Chief Minister Pinarayi Vijayan, Finance Minister TM Thomas Isaac, Chief Secretary Tom Jose and heads of various Government departments in Thiruvananthapuram, representatives of the banks said they were convinced of the magnitude of the flood disaster and were prepared to provide loan assistance to Kerala on relaxed conditions.
Reports quoting official sources said that the World Bank and ADB officials had given assurance on speeding up the procedures connected with granting medium-term loans. Officials of the banks said after meeting the CM that the process had started and they would now go through the procedures.
Normally, the procedures for availing loans from the World Bank and ADB could take four years but they were expected to complete the process in six months considering the grave situation in the State, sources said. The banks would provide the State with loans at low interest rates provided the Government stuck to the procedures, they said.
However, the State Government will have to submit to the World Bank clear projects by specifying the areas for which it needed international loan assistance. A bank official said that they were ready to consider the specific projects provided these had the clearance “from the State Government and national government.”
Though State Governments have the right to avail international loans for projects as per the country’s federal system, this could be done only with the sanction of the Central Government, sources said No decision has been taken on the loan size the State would require though officials had said earlier that the Government was looking for a Rs 3,000-crore assistance.
The CPI(M)-led lDF government is seeking loans from agencies like World Bank and ADB in the context of the reported reluctance of the Centre to change the policy of not accepting disaster assistance from foreign governments. The Centre had reiterated this stand following reports about a Rs 700-crore assistance from UAE for post-flood rehabilitation in Kerala.