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Isaac wraps up Rs.1,000-crore package

Thomas Isaac says he has made an important shift in development strategies.

Thiruvananthapuram: Finance Minister T.M. Thomas Isaac on Saturday wrapped a Rs.1,000-crore financial package with the National Bank for Agriculture and Rural Development (Nabard) for a slew of projects under the bank’s Rural Infrastructure Development Fund (RIDF).

Addressing a press conference here, Dr. Issac said the package would cover seven new drinking water projects and the revival of 15 incomplete Life Insurance Corporation of India-funded projects worth Rs.500 crore. The estimates for these projects would be completed and put up by May 15.

The other development sectors would get Rs.250 crore, mainly covering schemes incomplete over and above the Rs.250 crore that Nabard had earmarked under RIDF for the State. These schemes would be implemented either directly by the respective departments or through a Special Purpose Vehicles (SPVs). The State government and Nabard had agreed to seek out new sectors for funding, including reclamation projects.

The decisions were taken at the end of a high-level meeting held at Nabard’s regional office by Dr. Isaac and Nabard officials headed by its Chief General Manager Bhawar Puri.

He said Nabard had sanctioned a total of Rs.2,073 crore in the last 15 years, but Kerala had been able to utilise only Rs.1,322 crore, or 64 per cent of the sanctioned amount. It had also lost Rs.92 crore during this period owing to failure to provide proper documentation, utilisation certificate and appropriate follow up of completed schemes. Identifying the reasons for poor utilisation of funds available from Nabard, including under the RIDF, the Minister said it took nearly two years to finalise the tenders for respective projects. However, RIDF funds were available only for a three-year period. There was a cost escalation of as much as Rs.200 crore owing to delay in preparing projects. Dr. Isaac said he had made an important shift in the development strategies in his budget for 2008-09, with the emphasis on increasing capital expenditure from a poor average of 0.5 per cent to 2 per cent on roads, drinking water and bridges. This would involve an investment of Rs.2,000 crore from guaranteed sources.

In order to take advantage of the Rs.1,000-crore financial package, it had been decided to improve monitoring at the implementation level. The existing projects would be completed in a time-bound manner.

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