Kerala - Alappuzha   

Financial crisis: Centre's nod for taking Rs.1,000-crore loan

Staff Reporter

Budget promises will be implemented, says Isaac

T.M. Thomas Isaac

ALAPPUZHA: The Union Government has issued orders granting permission to take loans to the tune of Rs.1,000 crore from the pooled fund of small savings of other States and open market to overcome the present financial crisis, Finance Minister T.M. Thomas Isaac has said.

Inaugurating a function organised to distribute aid to cooperative societies in the coir sector, Mr. Isaac said the decision of the Centre would help the State tide over the crisis arising from being on overdraft from February 7. The Finance Minister said in the context there would not be any difficulty in implementing the promises made in the budget.

Though the interest rate of the proposed loans might be higher than that of National Savings Scheme, it was a relief to the State in the present situation, he said. Explaining the reasons for the present crisis, Mr. Isaac said the State expected a loan to the tune of Rs.3,000 crore this financial year from the national savings scheme.

But with the Union Government disallowing institutional investors to deposit in National Savings Scheme, the deposits in national savings scheme from the State reduced considerably and in turn the loan amount eligible to the State also got reduced, he said.

Mr. Isaac said the Government charted out a plan with the help of Supplyco, Consumerfed and cooperatives to overcome the price rise of essential items. The Supplyco would purchase essential items directly from the producers in other States and would sell it to consumers at a fair price through its outlets and special markets to be opened by cooperatives.

He said the State cooperative bank would extend loan to the Supplyco for the purchase.

Mr. Isaac said the market intervention by Supplyco would not be aimed at making profit. The Government would compensate any losses incurred by the Supplyco by its planned market intervention.

Mr. Isaac said the Supplyco had been asked to implement the plan of the Government on a war-footing.

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