Centre diverts World Bank's flood fund for COVID fight, Kerala loses Rs 1,750cr

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Thiruvananthapuram: A loan of Rs 1,750 crore promised by the World Bank for rebuilding Kerala post-floods has met a roadblock after the Centre issued a diktat. 

As the Centre is directly taking loans from the World Bank due to the COVID-19 crisis, the states have been prevented from availing the development policy loan (DPL).

Therefore, the Kerala government has now initiated steps to alternatively avail the Program-for-Results (PforR) financing from the World Bank. However, this might take considerable time as the procedures are onerous.

The World Bank had approved Rs 3,500 crore for the Rebuild Kerala Development Programme. Of this, Rs 1,750 crore was disbursed in September last year. The second tranche of Rs 1,750 crore was expected last month. Meanwhile, the Union government imposed this regulation.

What is PforR?

In the Program-for-Results (PforR) financing, the entire money would not be remitted in advance. The money would be released as and when the projects are completed. Therefore, the money cannot be used for other requirements. But in the DPL, the money would be released in advance in a lump sum.

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