Why borrow money from abroad, low-interest loans available in India: BJP state chief to Kerala CM

BJP state president Rajeev Chandrasekhar on Tuesday questioned why Kerala Chief Minister Pinarayi Vijayan borrowed money at a higher interest rate from abroad through Masala Bonds, when low-interest loans were available in India.In a Facebook post, Chandrasekhar posed several questions to Vijayan, including on why Rs 2,100 crore was borrowed from abroad via Masala Bonds at an interest rate of 9.5 per cent and why he did not try to obtain the loan from the Indian market at lower interest rates.Chandrasekhar also alleged Rs 21 crore was paid as commission to an intermediary and asked who that was.

BJP state president Rajeev Chandrasekhar on Tuesday questioned why Kerala Chief Minister Pinarayi Vijayan borrowed money at a higher interest rate from abroad through Masala Bonds, when low-interest loans were available in India.

In a Facebook post, Chandrasekhar posed several questions to Vijayan, including on why Rs 2,100 crore was borrowed from abroad via Masala Bonds at an interest rate of 9.5 per cent and why he did not try to obtain the loan from the Indian market at lower interest rates.

Chandrasekhar also alleged Rs 21 crore was paid as commission to an intermediary and asked who that was. He also questioned whether the required permission under the Foreign Exchange Management Act (FEMA) was sought.

The BJP state chief contended that these were ''relevant questions'' and if the Kerala government was ''honest'', it should have answered them by now. He also contended that all other states in the country raise money from within India through bonds.

Chandrasekhar claimed that the CPI(M) will try to trivialise this issue as well, just like they did the loss of gold from Sabarimala, but it will not be permitted.

His post comes a day after Enforcement Directorate (ED) officials revealed that the agency has issued a Rs 466-crore FEMA show cause notice to Vijayan, former finance minister Thomas Issac, and the CM's chief principal secretary K M Abraham in the KIIFB Masala Bond case.

The notice, which does not require a personal appearance, was issued about 10-12 days ago by the ED, the officials had said.

While the CM is yet to respond to the development, Isaac termed the central agency's move as ''politically motivated'', while Abraham, also the the CEO of the Kerala Infrastructure Investment Fund Board (KIIFB), contended that no provision of FEMA or any other law was violated.

The allegations in the Enforcement Directorate's show cause notice are based on false figures, misrepresentation of facts, and a flawed understanding of applicable regulations, he had said in a Facebook post.

The ED probe is related to the end-use of Rs 2,000 crore raised by KIIFB through masala bonds, and its compliance with the FEMA norms.

KIIFB is the primary agency of the state government for financing large and critical infrastructure projects.

It had raised Rs 2,150 crore in 2019 through its debut masala bond issue as part of its plan to mobilise Rs 50,000 crore to fund large and critical infrastructure projects in the state.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)