Kerala Appeals to Modi for Relief on Seaport Funding

Kerala Chief Minister Pinarayi Vijayan has urged PM Modi to rescind a Finance Ministry mandate requiring the state to repay Viability Gap Funding for the Vizhinjam Seaport. Vijayan argues that this contradicts standard funding guidelines, turning grants into loans, posing a significant fiscal burden on Kerala.

Kerala's Chief Minister, Pinarayi Vijayan, has formally requested Prime Minister Narendra Modi to intervene and overturn the Finance Ministry's mandate that necessitates the state to repay the Viability Gap Funding (VGF) allocated for the Vizhinjam International Seaport project. The letter, dated December 10, highlights Vijayan's concerns over the financial implications for Kerala.

The Chief Minister's letter contends that the central government's requirement deviates from established VGF guidelines, which traditionally categorize such funding as a one-time grant rather than a repayable loan. Vijayan insists that enforcing repayment would effectively convert the assistance into a loan, contravening the fundamental purpose of the VGF scheme.

Emphasizing Kerala's substantial Rs 5,554 crore investment in the seaport project, Vijayan calls for the immediate withdrawal of the repayment condition. He underscores that the state's significant financial commitment and the national benefits, including foreign exchange savings, warrant a reevaluation of the repayment demand. Previously, in November, Vijayan had approached Finance Minister Nirmala Sitharaman seeking her support to ensure the Centre's share of VGF is provided without imposing repayment terms.

The VGF scheme, which aims to boost offshore wind energy projects, was approved by the Union Cabinet in June under Modi's leadership. It focuses on enhancing renewable energy capabilities, allocating Rs 6,853 crore for 1 GW of offshore wind capacity across Gujarat and Tamil Nadu, reinforcing India's move towards sustainable energy sources.

(With inputs from agencies.)