Restore rural infra fund interest rate to 6.5 %: CM

Apr 28, 2012 |

chennai

Tags:

Chief minister J. Jayalalithaa has opposed Reserve Bank of India (RBI) enhancing the interest rate on rural infrastructure development fund (RIDF) to 8 per cent per annum, and urged Prime Minister Manmohan Singh to restore it to its original rate of 6.5 per cent.

The chief minister, in a letter to the PM, said, “Such a high rate will make RIDF loans unviable and the states will be forced to cut down on investment in rural infrastructure which is vital for inclusive development.”

“If at all the interest rate has to be enhanced, it should be kept around 7 per cent and made applicable only to the loans for those projects which will be sanctioned from 2012-13 onwards,” she suggested.

She said it was more shocking that RBI had made the higher interest rate applicable to drawals after April 1 even for projects already sanctioned in the previous financial years. The PM would agree with her that once a project was sanctioned, it was not fair to alter the conditions, she said.

She said the 'unilateral action' has totally taken TN by surprise and upset the financial projections. “As a result, TN will have an additional interest burden of Rs229 crore on the projects already sanctioned and under implementation,” said the CM.

At present, the state has a bank sanction of `2,184 crore for which funds will be drawn in 2012-13 and subsequent years, she said, adding, “We had proposed such massive investment using RIDF loan only on assumption that the lending rates would remain reasonable,” the chief minister added.

Post new comment

<form action="/comment/reply/146854" accept-charset="UTF-8" method="post" id="comment-form"> <div><div class="form-item" id="edit-name-wrapper"> <label for="edit-name">Your name: <span class="form-required" title="This field is required.">*</span></label> <input type="text" maxlength="60" name="name" id="edit-name" size="30" value="Reader" class="form-text required" /> </div> <div class="form-item" id="edit-mail-wrapper"> <label for="edit-mail">E-Mail Address: <span class="form-required" title="This field is required.">*</span></label> <input type="text" maxlength="64" name="mail" id="edit-mail" size="30" value="" class="form-text required" /> <div class="description">The content of this field is kept private and will not be shown publicly.</div> </div> <div class="form-item" id="edit-comment-wrapper"> <label for="edit-comment">Comment: <span class="form-required" title="This field is required.">*</span></label> <textarea cols="60" rows="15" name="comment" id="edit-comment" class="form-textarea resizable required"></textarea> </div> <fieldset class=" collapsible collapsed"><legend>Input format</legend><div class="form-item" id="edit-format-1-wrapper"> <label class="option" for="edit-format-1"><input type="radio" id="edit-format-1" name="format" value="1" class="form-radio" /> Filtered HTML</label> <div class="description"><ul class="tips"><li>Web page addresses and e-mail addresses turn into links automatically.</li><li>Allowed HTML tags: <a> <em> <strong> <cite> <code> <ul> <ol> <li> <dl> <dt> <dd></li><li>Lines and paragraphs break automatically.</li></ul></div> </div> <div class="form-item" id="edit-format-2-wrapper"> <label class="option" for="edit-format-2"><input type="radio" id="edit-format-2" name="format" value="2" checked="checked" class="form-radio" /> Full HTML</label> <div class="description"><ul class="tips"><li>Web page addresses and e-mail addresses turn into links automatically.</li><li>Lines and paragraphs break automatically.</li></ul></div> </div> </fieldset> <input type="hidden" name="form_build_id" id="form-40db227b5cbb8ded147d732289587da9" value="form-40db227b5cbb8ded147d732289587da9" /> <input type="hidden" name="form_id" id="edit-comment-form" value="comment_form" /> <fieldset class="captcha"><legend>CAPTCHA</legend><div class="description">This question is for testing whether you are a human visitor and to prevent automated spam submissions.</div><input type="hidden" name="captcha_sid" id="edit-captcha-sid" value="88811417" /> <input type="hidden" name="captcha_response" id="edit-captcha-response" value="NLPCaptcha" /> <div class="form-item"> <div id="nlpcaptcha_ajax_api_container"><script type="text/javascript"> var NLPOptions = {key:'c4823cf77a2526b0fba265e2af75c1b5'};</script><script type="text/javascript" src="http://call.nlpcaptcha.in/js/captcha.js" ></script></div> </div> </fieldset> <span class="btn-left"><span class="btn-right"><input type="submit" name="op" id="edit-submit" value="Save" class="form-submit" /></span></span> </div></form>