SMC turns down NRI loan offer

Jagadeesan, on his return from Gandhinagar — where he met officials of the Finance department and discussed the loan offer — on Saturday said that the only way the deal could go ahead was with the State government’s permission. Incidentally, Jagadeesan had been apprehensive about the proposal but gave it his okay after soliciting the expert opinion of noted tax consultant Ravindra Vepari.

Quoting his discussion at Gandhinagar, Jagadeesan said that according to a 1995 government resolution, a loan offer from any individual or organisation to any civic body could not even reach discussion stage without the Central or State government’s knowledge and permission.

He said that finance department officials felt that if the firm was ready to charge only 5.5 per cent interest, its offer could be extended to the Gujarat government or even the Narmada project. Officials told him that the firm would have to discuss the proposal with the state government and specify the source of money, Jagadeesan said, adding that he had passed on the message to the NRI firm’s Mumbai agent Suresh Bedi.

Chauhan, however, said that the same government resolution debarred civic bodies from holding discussion with all financial institutions, including the World Bank.

If the civic body approached the World Bank on its own, it could follow the same principle here, by nodding the proposal through and then seeking an endorsement from the State government, he added.

The same party had given a similar loan in the past to a Tamil Nadu civic body, Chauhan said, adding that since the loan would be in Indian currency, the government could have no objection.

The civic body had nothing to lose, the BJP leader said, adding that the firm’s insistence on advance payment of two per cent commission and 0.2 per cent administrative expenditure was not an irregular practice. Moreover, the firm has agreed to receive the amount only after realisation of the loan, he said, adding that the offer should be grabbed with both hands.