Austerity measures to cut 20 pc on plan expenditure
KOCHI: In a bold and innovative move, the Kerala Government is exploring the possibility of roping in the funds from corporate social responsibility (CSR) for the rehabilitation and rebuilding of the State that is ripped apart by the floods in August.
Today’s Cabinet meeting has also voted in favour of cutting this year’s plan expenditure by 20 per cent in order to accommodate the funds needed for the rehabilitation of the State.
“However, students’ scholarship, irrigation works or the works related to the supply of drinking water will not be affected by these austerity steps,” the CM, Pinarayi Vijayan said while briefing the media on the Cabinet decisions.
Usually the companies with a net worth of Rs500 crore or annual income of Rs1000 crore or an annual profit of Rs 5 crore, are required to spend on CSR activities.
This expenditure should be at least 2 per cent of the average profit of three years. According to the CSR rules, the provisions of CSR are not only applicable to Indian companies, but are also applicable to the foreign company’s branch in India and the project office of the foreign companies too.
While interacting with media, the chief minister looked resolute and was amply clear while explaining the plans drawn out for the redoing of the state as well as rehabilitating its people. He was also sounding particular about the timeframe in which the works need to be completed.
The press briefing, which was mostly devoid of any political innuendos from neither the press members nor the CM himself, was very much confined to rehabilitation works the State is supposed to take up in the aftermath of the devastating floods.
The CM said the Government has decided to announce moratorium on all agricultural loans, loans to dairy farmers and educational loans for one year. “Moreover, this moratorium will not attract the usual terms the state level bankers committee (SLBC) normally prescribes for such moratoriums,” the CM reminded.
The World Bank- Asian Development Bank reports peg the losses at about Rs25,000 crore but if the two international agencies are to lend funds to the state’s rehabilitation and rebuilding, the Central Government’s official go-ahead will certainly be required. Interestingly, the Centre has, of late, been very much receptive to the State’s stand on Central aid.
It is estimated that Rs2534 crore will be needed to reconstruct houses that are fully or partly damaged. The losses from the damage to the roads alone could go up to Rs8554 crore according to preliminary counts.