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ADB loan: Isaac clarifies

Special Correspondent

Thomas Isaac

NEW DELHI: Kerala Finance Minister Thomas Isaac on Wednesday sought to set the record straight on the technical aspects of the controversial loan agreement that the State has signed with the Asian Development Bank (ADB).

In the Capital to attend a meeting of the Empowered Committee on Value Added Tax, Mr. Isaac addressed the media to clarify his position but steered clear of all political questions relating to the ADB loan.

He also circulated a revised note on the Kerala Sustainable Urban Development Project and said the media could examine the loan agreement and the final version of the Report and Recommendations of the President (RRP) to the Board of Directors to the ADB.

"The RRP is an internal document of the ADB, and the Government of Kerala is answerable and accountable only to the specific assurances incorporated by the Government in the loan agreement and the various specific references to the RRP in the loan agreement signed,'' Mr. Isaac pointed out in his written statement.

Referring to the draft RRP, the Minister said there were a number of anti-people conditionalities in the original loan document and the draft RRP which was forwarded to the Kerala Government by the ADB in October.

After consultations with the Mayors of the five municipal corporations, substantial changes were made in the conditionalities. As for the changes that the ADB agreed to, Mr. Issac said the most significant were the targets set for user charges and tax enhancement cited in Annexure 11 of the RRP.

This was summarily rejected and it was decided that the municipal corporations would prepare their own action plans based on policies they deem fit for taxation and user charges.

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