The Central Government has extended the deadline for Kerala to utilize the ₹529.50 crore interest-free loan sanctioned for the rehabilitation of landslide-affected areas in Wayanad. Initially, the funds were to be expended by March 31, 2025, but the state government expressed challenges in meeting this timeline.
In February 2025, the Centre approved a Special Assistance Loan of ₹529.50 crore under the Scheme for Special Assistance to States for Capital Investment 2024-25. This loan, repayable over 50 years, was allocated for 16 projects aimed at reconstructing infrastructure in the landslide-affected regions of Chooralmala and Mundakkai in Wayanad. The projects encompass the construction of public buildings for resettlement, development of roads, river training of Punnappuzha river, and establishment of essential facilities like fire and rescue stations, schools, and healthcare centers.
Upon receiving the loan, Kerala's Finance Minister, K N Balagopal, highlighted the impracticality of utilizing such a substantial amount within the stipulated timeframe, labeling it a "huge practical problem." He emphasized that while the state had requested both grants and loans for Wayanad's rehabilitation, the allocation came solely as a loan with stringent conditions.
The Leader of Opposition in the Kerala Assembly, V D Satheesan, echoed these sentiments, criticizing the Centre's decision to provide a loan instead of a grant. He described the move as an attempt to "suffocate Kerala while pretending to help it," given the challenges in utilizing the funds within the original deadline.
In response to the state's concerns, the Central Government has agreed to extend the utilization deadline, providing Kerala with additional time to effectively implement the rehabilitation projects. The exact duration of the extension has yet to be specified. This move aims to ensure that the allocated funds are used efficiently to rebuild essential infrastructure and support the affected communities in Wayanad.
The Kerala government has welcomed the extension and is set to expedite the planning and execution of the approved projects. An emergency meeting chaired by Finance Department Additional Chief Secretary Dr. A Jayathilak, along with principal secretaries from relevant departments, is scheduled to strategize the optimal utilization of the funds within the extended period.
This development underscores the collaborative efforts between the state and central governments to address the rehabilitation needs of Wayanad, ensuring that the affected regions receive the necessary support for reconstruction and development.