The State’s dissatisfaction was voiced by Finance Minister Thomas Isaac in his first interaction with media personnel after the RBI announcement. The RBI, the finance minister said, does not seem to have realized the gravity of the financial crisis arising out of the outbreak of the dreaded corona virus, Isaac added.

The reduction in reverse repo rate and other measures announced by the RBI would not solve the state’s problems, Isaac contended.

The Kerala FM demanded that three steps be taken immediately to alleviate the sufferings of the people reeling under the impact of the ongoing economic crisis.

As a first step, the loans taken by the farmers who are among the hardest hit b y the lockdown should be written off forthwith. That the Government has not taken this step so far is shocking, said the FM.

The Government should not hesitate to write off the loans of farmers now. It lost no time in writing off loans running into crores taken by the corporates. The same yardstick should be employed in the case of the farmers too, demanded Isaac. Failure to do so would mean that the Government’s commitment to alleviate the sufferings of the farmers and the poor is nothing but an eyewash.

Kerala’s second demand is that there should be a one-year moratorium on repayment of loans. The Government had earlier declared a three-month moratorium on loans. But that is not enough. What the Government should do is to declare a one-year moratorium. And, most importantly, the interest of the moratorium period should be written off.

Thirdly, the small and medium businessmen should be given funds to reopen their establishments and shops. Mere lifting of the lockdown or easing of the restrictions will not help them and the shopkeepers. Their loans should be restructured and they should be allocated funds to not only reopen their establishments but also to run them smoothly.

Unfortunately, the RBI Governor was silent on all these three issues. Either the Union Finance Minister or the RB I Governor should immediately concede these demands made by the State.

The RBI is also silent on direct borrowing from the RBI for central and state governments. Banks the world over have announced that they would print more currency and directly lend to Governments. But the RBI has remained silent on this, Isaac pointed out.

The increase in Ways and Means Advance (WMA) by 60 per cent would not help states like Kerala either. The total sanctioned upper limit for borrowing, including WMA, is Rs 3159 crore. The latest announcement would mean that Kerala would benefit only By Rs 729 crore, Isaac said.

Also, Kerala’s problems would be over only if the fiscal deficit limit is raised from 3 per cent of the GDP to 5t per cent, the FM argued.

The Centre should also release the GST arrears the States are entitled to without any further delay. Kerala’s GST arrears is or the order of over 3,500 crores. The release of the arrears, Isaac said, would go a long way in easing the financial burden on the cash-strapped State.

Isaac, however, welcomed the Rs 50,000-crore refinance to all-India organisations like the NABARD, SIDBI and National Housing Bank. This, he hoped, would help Kerala’s initiatives like the Life Mission. (IPA Service)