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Our people made RIBs successful, so give us a share, demands Kerala

D Jose in Thiruvananthapuram

Kerala has demanded a share of the amount mobilised by the Government of India under the recent Resurgent India Bonds scheme. The demand first made by Left Democratic Front convenor V S Achutanandan has gained support from various quarters in the state.

Both planners and politicians in the state feel the central government owed a major share of the Rs 160 billion mobilised under the bonds as Keralites working in the Middle East and South East Asian countries constituted the bulk of contributors.

State Chief Minister E K Nayanar has written a letter to Prime Minister Atal Bihari Vajpayee demanding the due share to the state. The letter released to the press said the state had a right for a share of the funds since the largest contribution to it came from Keralites working abroad.

The chief minister justified the demand saying that central investments in the state have been on the decrease. He said that several industrial and power projects under the central public sector were affected due to shortage of funds. He said the Kayamkulam and the Cochin Refineries power projects were facing acute scarcity of funds.

Achutanandan said that 50 per cent of the mobilisation was from the Middle East, where Keralites constituted 40 to 50 per cent of the Indians. He said an estimated Rs 40 billion to Rs 50 billion might have come from Keralites and that the natural expectation of the contributors was that the amount should be spent for the development of their state.

Achutanandan said the mobilisation of funds through the RIBs has given an opportunity to the central government to correct the injustice it has been showing to the state. He demanded at least one fourth of the amount to be used for developing infrastructural facilities in Kerala.

The Marxist leader wanted the capacity of the Kayamkulam thermal plant to be raised to 2,000 mega watts for which Rs 50 billion to Rs 60 billion would be required. He also wanted priority to be accorded to the electrification of the Mangalore-Nagercoil railway line.

There were many such projects to be taken up immediately. The fund mobilised by the Centre should be used for these purposes, Achutanandan said.

A state Planning Board official said the politicians were right in demanding a share for the state as central investments in Kerala are on the decline.

Central investment in industries in Kerala has come down from four per cent in the 1970s to below two per cent. Investment has been hovering around 1.5 per cent in the past decade, the Planning Board official pointed out. Central investment in Kerala in 1995 was Rs 29 billion as against the total investment of Rs 2,273 billion in the whole country. This constituted only 1.28 per cent of the total investments, the planning board official pointed out.

The official said the credit deployment by banks in the state has also been below the national average though Kerala topped in deposits. A major chunk of the deposits the banks have in the state are NRI deposits of Keralites working abroad.

Out of the total deposit of Rs 241 billion mobilised by all the banks in Kerala in 1997, Rs 107 billion were NRI deposits. This constituted nearly 40 per cent of the total deposits.

The state government has been asking the Union government to come forward to establish a rehabilitation machinery for the NRIs in view of their contribution to the foreign exchange reserves. The state government had submitted a comprehensive scheme costing Rs 75 billion to the central government after the Kuwait war. The Centre did not respond to the scheme apparently due to the financial commitment involved.

The state government feels the Centre should seriously consider the scheme as the NRIs have contributed to the nation at its crisis. The Centre should bear the burden of rehabilitating the NRIs who are forced to return to the country for one reason or the other, said the Planning Board official.