Kerala FM not happy with RBI announcements

Kerala FM not happy with RBI announcements

Thiruvananthapuram: An economist turned State Finance Minister Thomas Issac was least pleased after hearing the Friday statement of the RBI Governor Shaktikanta Das and said this was not going to be of any good to Kerala. He demanded that either Das or Union Finance Minister Nirmala Sitharaman should answer their concerns.

Issac told the media that in this new package that has come out, Kerala will only get “Rs 729 crores additional when we draw under the Ways and Means segment which has been raised to 60 per cent”.

“This once drawn will have to be repaid quickly also. What I want to ask, is there is no mention about waiving of the agricultural loans and not even any mention of a moratorium. The present moratorium of three months means nothing, as the interest will return and it would be of no use. Also, existing loans to all small traders and business should be restructured. I wish the Centre takes up these, if not, it won’t help any,” said Issac.

Issac said the need of the hour was that Kerala should be allowed to increase its borrowing from three to five per cent and through this the state will get about Rs 18,000 crores.

“The decision to provide institutions like Nabard financial assistance would be really good,” said Issac.

Former State Planning Board member C.P. John described the RBI directives as a very bold one.

“The reduction of reverse repo rates is hugely welcome as it will bring more liquidity, but the announcement by the RBI Governor’s statement that the GDP will reach seven per cent is a bit sketchy. In this aspect, this is like a politician’s statement,” said John, a leading opposition politician in Kerala.

State Planning Board member and an academic K.N. Harilal said the move to allow more money for commercial banks will see more credit being given and will help the economy.

“Institutions like Nabard, SIDBI and NHB are quite capable of handling situations like this in their area of work and will be looking to pump in the money,” said Harilal.