Kerala vs. Center: The Vizhinjam Seaport VGF Dispute

Kerala's Chief Minister Pinarayi Vijayan criticizes the Central Government's decision to treat the Viability Gap Fund (VGF) for Vizhinjam Seaport as a repayable loan rather than a grant. He argues that this contradicts their longstanding VGF policy and highlights the significant financial implications for the state.

Kerala Chief Minister Pinarayi Vijayan has voiced strong opposition against the Union Government's decision to treat the Viability Gap Fund (VGF) for the Vizhinjam Seaport project as a repayable loan. Speaking to the media, Vijayan accused the Centre of a vindictive approach towards the state.

In a letter to the state, Union Finance Minister Nirmala Sitharaman reaffirmed that the VGF allocation should not be regarded as a grant but as a loan. Highlighting previous instances, Vijayan argued that no repayment condition was imposed when VGF was allocated for projects like the Kochi Metro, describing the new criteria as a deviation from standard guidelines.

The issue has sparked concerns due to potential financial strains, with the Government of India expected to earn significant revenue from Vizhinjam Port, while Kerala faces a looming financial burden if the repayment condition stands. The Chief Minister reiterated Kerala's contributions to the project and requested equal treatment to other ports like Tuticorin.