Did not meet eligibility criteria; Centre denies Capex loan to Kerala

THIRUVANANTHAPURAM: Kerala, a state on the verge of a financial emergency, suffered yet another serious blow after the Centre declined to approve loans for the state under the Special Assistance to States for Capital Investments scheme (Capex). As a result, development initiatives like the Vizhinjam port will no longer receive funding from the Center. The state has lost an interest-free loan that needs to be repaid only after fifty years.

The Centre has disbursed Rs 1.3 lakh crores as Capex loans in the current financial year. However, no fund was approved for Kerala and Andhra as the two states had not "met the eligibility criteria prescribed under the Scheme". While Rs 81,195 crores were allocated last year, Kerala got Rs 1,903 crores. Andhra Pradesh received Rs 6,106 crores. However, both states failed to submit the details on the utilization of this fund and new projects. This has led to the present situation.

The total loan this year is 1.3 lakh crore. 98,157 crore has been sanctioned. Out of this, Rs 60,307 crore has been handed over to the states. Although there were hurdles in sanctioning loans to Manipur and Punjab, the governments of the respective states negotiated with the Center and resolved the matter. Manipur will receive Rs 759 crores, while Punjab will receive Rs 209 crores upon submitting the projects.

Kerala was planning to use Capex loans for development projects, including the construction of roads to the Vizhinjam port. It could have also avoided external borrowing through KIIFB in the health and education sectors. Although the state can claim that the Centre did not sanction the loans due to its political interest, states such as Tamil Nadu, Karnataka, and West Bengal, which are at loggerheads with the Centre, were sanctioned loans worth Rs 4,295 crores, Rs 4175 crores and Rs 7,523 crores respectively.