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Centre rejects Kerala's request of Rs 2044 crore; several projects in the lurch

The Union Finance Ministry declined Kerala's request of Rs 2044 crore citing that the state did not adhere to the conditions of the Centre. Due to this, several infrastructure projects in Kerala are in a lurch. 

Centre rejects Kerala's request of Rs 2044 crore; several projects in the lurch anr
First Published Dec 29, 2023, 11:20 AM IST

Thiruvananthapuram: The Central government rejected Kerala's application for Rs 2044 crores as the state did not comply with the conditions including branding. The central government is sanctioning long-term loans to the state governments as part of the anti-recession package introduced after the COVID-19 pandemic. Due to the Union Government's funding cut, the infrastructure projects in Kerala have come to a crisis. 

Kerala demanded Rs 2088 crore citing expenditure on development activities including KIIFB and Vizhinjam port. The Union Finance Ministry has clarified that the state is entitled to a special assistance of Rs 1925 crore. However, the financial assistance was denied because specific criteria were not met in the four development projects being implemented in the state with central assistance.

The Centre had made branding mandatory for the Swachh Bharat Mission, Ayushman Bharat, National Health Mission and Poshan Abhiyan Mission. However, Kerala stated that the projects implemented with the participation of the central and state cannot be labeled only as a central project.

The central government is yet to allocate Rs 5891 crore for various projects apart from the capital expenditure (CapEx) fund. The implementation of central government projects in the state is also in crisis.

Previously, it was reported that Kerala is devoid of Rs 57,400 cr in the form of GST compensation (Rs 12,000 cr), revenue deficit grant (Rs 8,400 cr), loan shelving (Rs 19,000 cr), and reduced tax devolution (Rs 18,000 cr). 

Later, it was reported that the Centre decided to exclude Rs 3,140 crore from the borrowing limit of the state. This amount was availed earlier by Kerala Infrastructure Investment Fund Board (KIIFB) and Kerala Social Security Pension Limited (KSSPL). The union government had previously chosen to include KIIFB and KSSPL's borrowings towards the state's borrowing cap.

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