The Hindu : ADB team cancels visit

Online edition of India's National Newspaper
Saturday, Feb 28, 2004

Kerala

Kerala

ADB team cancels visit

By Roy Mathew

THIRUVANANTHAPURAM, FEB. 27. The ADB team that was to arrive here this week for a mid-term review of the Modernising Government Programme (MGP) and fiscal reforms in the State, has cancelled its visit.

The review has already been delayed by about six months. This means that the State will not receive the second tranche of the ADB loan for MGP and fiscal reforms this financial year, which was to be released only on the basis of the review. No fresh date has been fixed for the review now.

The ADB released the first tranche of Rs. 601 crores in December 2002. The mid-term review, which was to cover expenditure of this amount, was postponed earlier owing to the delay in implementation of fiscal reforms and various initiatives under the MGP.

The non-receipt of the second tranche from the ADB would worsen the financial difficulties of the State unless the Centre permits the Rs. 800-crore market borrowing sought by the State Government. It is not yet clear whether the Centre would permit this as the State raised Rs. 299 crores from the market just a week ago.

Despite its poor finances, the Government has been incurring additional expenditure against the background of the coming elections. Early this month, it decided to regularise the appointments of a large number of teachers in aided schools made by private managements despite a ban issued by the Government.

Additional expenditure would now have to be incurred for drought relief.

However, the situation in the field is that even the money allocated for flood relief during the last monsoon has not been spent so far. Politicians are so busy trying to divert these funds for ineligible projects that even the orders of the Collector are not being carried out in districts like Idukki.

The Plan expenditure up to December 31 was only Rs. 2,006 crores out of an allocation of Rs. 3,190 crores, excluding the expenditure for power sector and MGP. Of the Rs. 640 crores earmarked for the power sector, the Government is straining to allocate Rs. 200 crores to the Kerala State Electricity Board to avert a power tariff hike.

A substantial portion of the Rs. 600 crores for the MGP is remaining unspent as the implementation is behind schedule.

At the same time, debts of the State have been mounting. In the current year, the outstanding debts would exceed Rs. 3,600 crores.

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