Centre grants loan of ₹529.5-cr for landslides, Kerala calls it ‘mockery of people’

The financial assistance by the Centre in the form of a loan to be repaid in 50 years came months after the Kerala government requested a special financial package to meet the rehabilitation costs

The Centre has sanctioned an interest-free loan of ₹529.50 crore to the Kerala government towards various landslide rehabilitation projects in Wayanad under the Scheme for Special Assistance to States for Capital Investment (SASCI), officials aware of the matter said on Friday.

At least 266 people were killed in the landslides that took place in the Wayanad on July 30 last year. (PTI)

The financial assistance by the Centre in the form of a loan to be repaid in 50 years came months after the Kerala government requested a special financial package to meet the rehabilitation costs, which are estimated to be ₹2,262 crore. The Centre had earlier labelled the July 30 landslide in Wayanad as a “disaster of severe nature”.

The letter from the Union ministry of finance, declaring the allocation of ₹529.5 crore under the scheme, stated that the funds are being provided for 16 projects to be implemented as part of rehabilitation measures in the areas of Mundakkai and Chooralmala, the most-affected settlements.

These projects will include construction of roads in the proposed township for rehabilitation of survivors, rebuilding fire and rescue station, construction of the Chooralmala bridge, reconstruction of schools in Vellarmala and Mundakkai, a water treatment plant in Karapuzha and construction of an electricity sub-station in Elstone township.

Interestingly, the letter mandated that the amount released under the scheme be utilised by March 31, 2025. “Release of funds to intermediate agencies without actual payment to the final recipient (parking of funds) will not be treated as expenditure,” it said.

Finance minister KN Balagopal said that the condition that the funds be utilised in just one-and-a-half months is not practical.

“In the backdrop of the landslide in Mundakkai-Chooralmala, we had requested the Centre for a grant of ₹2,200 crore. Normally, grants are provided to states in such circumstances. But the grant has not been given. We had also asked for a loan for the rehabilitation works since we have to begin work on it quickly. Now, the Centre has granted a loan of ₹529.5 crore under the Capex scheme. But there is a condition that the funds be utilised quickly. It will certainly be a big challenge to provide utilisation certificates (UC) for such big funds in such short time. There is a question of its practicality. The finance department officials will try to find a solution to it,” Balagopal told reporters.

“We will certainly go ahead with the aim of completing the first phase of rehabilitation and building the township for survivors by the next year,” he said.

At the same time, Leader of Opposition VD Satheesan termed the Centre’s move to grant a loan instead of a financial package for Wayanad a “mockery of the people of the state”.

“The instruction from the Centre is that the loan be utilised before March 31. This is impractical. The Centre is trying to suffocate Kerala by pretending to help it. The same government that has financially assisted other states, which suffered natural disasters, is denying Kerala the same assistance that it deserves to get. The Centre has the constitutional obligation to extend a financial package for the state,” he said.

At least 266 people were killed and 32 others are still missing after multiple landslides were reported in parts of Meppadi panchayat in Wayanad in the early hours of July 30 last year. Entire settlements, including schools, shops, religious institutions and houses, were flattened in a matter of hours. It is the worst landslide in terms of fatalities in the country.