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Taking cognisance of the extent of devastation from the floods, banks in Kerala have announced a moratorium on repayment of interest on crop loans for a period of one year.
The decision was taken at a meeting of the State Level Bankers Committee that met here yesterday in response to a request made by the State Agriculture Minister, VS Sunil Kumar.
Loan repayment
According to an official spokesman, the bankers committee also resolved to restructure the repayment of the loan amount over a period of five years. Nationalised banks, cooperative banks, small finance banks and scheduled banks have also agreed not to invoke the SARFAESI ACT to attach the properties for default on crop loans drawn by farmers.
According to preliminary estimates by the State Government, standing crops on over 46,000 hectares have been destroyed by the floods causing a loss of Rs 1,050 crore to more than 2.8 lakh farmers.
Chief Minister Pinarayi Vijayan said that the Reserve Bank has been requested to make special arrangement to allow exchange of fresh notes for those damaged in the floods. The Reserve Bank has favourably considered this request and has informed that necessary steps are being initiated to allow the exchange of the notes, Vijayan said.
Rebuilding expenses
According to the Chief Minister, rebuilding/reconstruction could require an investment that equals the size of the State's Annual Plan size of Rs 32,748 crore. Of this, the capital outlay for reconstruction would alone amount to an estimated Rs 10,330 crore. This is of a huge order and beyond the State's capabilities.
The State Government is now with the unenviable option of either funding the requirement of reconstruction or ignore the annual developmental needs. This is a tough call to make, and sums up the gargantuan challenge before the State Government in order that there is no freeze on funds at large for routine developmental works.
And this is not including the considerable expenditure needed to repair/reconstruct houses damaged by the floods and restore the lives and livelihoods. So it explains how the State looks to the Centre for funds and assistance in kind, no amount of which would be too large viewed from the State's specific needs of the hour.
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