Government eases lending rules, gives Rs 543 crore as aid to flood-hit Kerala

The Union government has made it easier for people in Kerala to apply for the government’s subsidized housing loan scheme and released on Friday Rs 543 crore under the rural employment programme MGNREGS, raising the financial assistance to the southern state where flash floods earlier this month led to widespread devastation.

At least 265 people have been killed since August 8, when a week-long bout of heavy rains began, and the state government said assets worth Rs 19,500 crore had been destroyed as floods washed away homes, roads and bridges.

The funds released Friday will help reconstruction efforts under MGNREGS (Mahatma Gandhi National Rural Employment Guarantee Scheme), a social security programme that allows administrations to hire people for labour work.

According to an official in the Union government, in addition to releasing the funds and sanctioning 55 million person-days of work, the Union government has also asked the state for a fresh labour budget so that more money can be given.

 

Earlier this week, the Kerala government wrote to the Centre seeking additional MGNREGS fund to cover reconstruction works.

The wages for unskilled labour is entirely sponsored by the Union government, which also pays 75% of the cost for skilled and semi-skilled workers, and underwrites the cost of the material required.

The federal government also relaxed norms for the rural housing finance scheme Prime Minister Awas Yojana (PMAY) —one of the most popular programmes across states—to allow more people to rebuild homes they lost in the floods.

“We told the state that if someone’s home, built earlier with government funds, has been washed away in this flood, he must be allowed to get funds and build another house for himself. We have earmarked fund for areas affected by natural calamities and 11,000 houses can be built out of that,” the Union rural development secretary Amarjeet Sinha said.

The Centre directed Kerala to include beneficiaries previously excluded from the rural housing scheme. People paying income tax, owning a house made of bricks, a refrigerator or a landline phone as determined by the Socio Economic Caste Census were automatically excluded from the PMAY.

Friday’s announcement comes amid a row between the state and centre over funding of restoration work, particularly in light of a purported offer from the United Arab Emirates that may not be cleared by the Union government in line with established protocols.

“We asked Union Gov for financial support of Rs 2200 Cr ; they grant us a precious Rs 600 Cr. We make no request to any foreign gov but UAE gov voluntarily offer Rs 700cr. No, says Union gov, it is below our dignity to accept foreign aid. This is a dog in the manger policy,” Kerala’s finance minister Thomas Isaac said in a tweet on Wednesday.

A day later, a senior UAE diplomat in New Delhi clarified that the country was yet to officially announce any financial aid for Kerala flood relief.

“Kerala government has so far appreciated the help from the Centre. But let’s remember that this MGNREGS money also contains a large arrear . On August 30, Kerala government has called a special session of assembly to discuss the situation with all parties. Meanwhile, they have sought permission for imposing a cess on GST and bypassing the FRBM act temporarily,” said CPI(M) politburo member Brinda Karat.

Both those measures would help shore up the state’s revenue as it embarks on a massive reconstruction project.