Rehabilitation process of the floods, that claimed close to 350 lives, has gathered momentum
Kerala Flood : In order to open more fundraising channels for reconstruction and rehabilitation of its flood-hit areas, Kerala is set to approach the central government to increase its market borrowings limit from 3 per cent of Gross State Domestic Product (GSDP) to 4.5 per cent. The state is already in talks with the World Bank to raise Rs 100-150 billion. This comes at a time when the Centre has declined aid from foreign countries like the United Arab Emirates, which, according to Chief Minister Pinarayi Vijayan, promised “Rs 7 billion”.
If the Centre agrees to relax the Fiscal Responsibility and Budget Management (FRBM) rules for Kerala, its ability to raise money from the markets may increase by around Rs 115 billion. “At present, our FRBM limit is 3 per cent of GSDP, which we are planning to ask the Centre to increase to 4.5 per cent,” said a state official close to the development. However, senior Union finance ministry officials say there are strict parameters for relaxing the FRBM limit, and hence the borrowing and expenditure limits, for a state.
There are no precedents for relaxing the FRBM limits for any state due to natural disasters.
“The FRBM limits are strictly defined and hence giving a one-time relaxation to Kerala because of the floods is unlikely,” said an official. “The state is free to borrow within its limits, and the central government will release more funds to help rebuild the state after the floods,” the person said.
As far as the central government is concerned, a well laid-down process is followed before deciding the aid to be given to a disaster-affected state, officials say. In case of drought, it is the Union agriculture ministry which takes the lead, and in case of other disasters, it is the Union home ministry.
Read Full Source : BS
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