Nirmalaji's interest-free loan

Free Thinker *

The budget announcement of “interest-free loans for 50 years” is real nectar for us in this ‘Amrit Kaal’. Rupees 1.3 lac core is earmarked for this. We should jump upon it. We can’t remain silent spectators.

Nirmala ji is quite close to our Chief; actually, she made him the Chief(I mean announced). So, we have high hopes that we shall get a lion’s share. Now, a hyper-active team may be constituted to run after this interest-free loan (for capital expenditure).

FM says that the States must come up with proposals and set it rolling; she also said that the loan offer can be used by the States for their own preferred projects. Certainly, a Unity Mall can be constructed at the state capital to promote and market the State products (one district, one product type).

We are a poor State; in the near future, we are going to be very rich. Infrastructure development and building connectivity shall be the base for our prosperity. We must set up infrastructure and connectivity to lead us to prosperity.

But we don’t have the resources or financial power to push huge infrastructure and connectivity development; it is not only about roads but also about the power supply, hotels, godowns, factories, etc. The train is reaching Imphal; we need good roads from commercial hubs for linking to the train stations so that the business is done without bottlenecks.

Hon. FM in her budget presentation indicated that States can take interest-free loans from April onwards. A corpus fund of more than 100 cores has been earmarked for this. They may avail of the loan for their capital expenditure i.e., for the construction of highways, warehouses, hospitals, schools, malls, buildings, etc. If the proposals are in order the loans will be sanctioned instantly.

State financial managers must take note of this offer. This is a golden opportunity for us. The most attractive part of this financial bonanza is that the loan is interest-free. Hon. CM is also the in-charge of State Finance and so, he must take the initiative to do the needful. The concerned bureaucrats must be alerted and must be made agile enough to get the maximum from this magnificent offer.

Even the rich states will take advantage of the new loan scheme of the Central Government. Because it is interest-free and at the same time it is for 50 years. Obviously smarter States will get the maximum benefit from this. I strongly believe that Manipur has persuasive skills. Our leaders will be able to manoeuvre in Delhi. If we get these loans our State can do a lot of things in infrastructure building and asset creation.

Nirmala ji has made it clear that this will be disbursed much faster than ever. As we have entered the Amrit Kaal this loan facility will certainly produce good results everywhere in the country. Hopefully, almost all the states including Manipur will do good things for further growth and progress.

The Fiscal Responsibility and Budget Management (FRBM) Act is not strictly followed these days because the financial condition of all the States including the affluent States is in very bad shape due to the Covid pandemic; only this year there are some signs of improvement.

Until and unless the economic health of the States improves to a satisfactory level the FRBM may be kept in abeyance. Strict compliance with FRBM is not possible for the time being, even for the richest States.

The proposed fifty-year loan is actually to push the center’s ambitious capital expenditure (capex) plan. 10 lac core is the amount earmarked for this capex thrust. The States are also showing interest in asset-building and infra-building. The indication so far is that the affluent States are taking more active participation. Perhaps this interest-free loan for 50 years may trigger growth based on capital expenditure.

We may request the Hon. Finance Minister that this interest-free loan may be allowed to be used for the repayment of the loans (bearing interest) borrowed from Banks and Financial institutions. That way we would be able to save a lot of money. We understand that the primary purpose of this interest-free loan is meant for capex.

Considering the feeble financial factors of the tiny State, Sitharaman ji may consider the proposition; of course in consultation with the PMO. The interest payment is a humongous burden for the State which depends on borrowings and aid. The interest payment on the market borrowings is indeed a major headache. A major chunk of our finance goes toward interest payments on existing loans. Forget about repayment of the principal loan amount.

If the Union government allows us to use this interest-free loan to repay the interest-bearing loans, it will be a great relief. It applies to all economically weaker and financially fragile States. “replacing the old political … ”, Nirmala ji. Can’t it be old political parties or old political ideologies, or old political families instead of ‘old polluting vehicles’ Madam ji? Because I am still having one.