CM Vijayan, Sitharaman meet breaks the ice as LDF warms up to Centre amid fund crunch

The breakfast meeting was also attended by Kerala Governor Rajendra Vishwanath Arlekar, who Tuesday met MPs from the state in a first such interaction, during which Arlekar assured them that he will stand with the state government in raising its issues before the Centre. Arlekar’s predecessor Arif Mohammed Khan had an uneasy and at times stormy ties with the Vijayan government.

The relations between the LDF government and the Centre has been marked with disputes over various issues such as the financial assistance for rehabilitation of the Wayanad landslide victims, limits on the state’s borrowings, and the discontinuation of the GST compensation. The Left government has often accused the Centre of “discrimination” in allocation of funds to the state, which has been reeling under a financial crisis. Vijayan and his entire Cabinet had even staged a protest in Delhi over these issues around the same time last year.

Hoping to take a third straight shot at power, Vijayan now, in the last year of his second term as the CM, seems to be trying to dial down tensions with the central government.

On the menu at the meeting was an assortment of Kerala breakfast dishes, sources said. On the discussion table was a plea to the Centre by the state government for clearing its pending demands, including a hike in the borrowing limits, release of the Centre’s share of Rs 817.80 crore in the Viability Gap Funding (VGF) for the Vizhinjam seaport, and more financial assistance for rehabilitation of the Wayanad landslide survivors.

The Centre recently sanctioned a loan of Rs 529.50 crore to Kerala, but the state government claimed that it came with stringent conditions, including the stipulation for utilisation of the entire amount by March 31. The state has sought a relaxation in this deadline.

During his meeting with Sitharaman, Vijayan also called for ironing out issues regarding the implementation of the semi-high speed railway system and the sharing of the land acquisition costs for the national highway expansion in Kerala.

Sources said Sitharaman assured the CM that the Centre would never deny what is due to Kerala as it believes in giving justice to all the states. She also told Vijayan that the Union finance ministry officials will meet the state government’s representatives for follow-up discussions on all the outstanding issues.

Vijayan’s meeting with Sitharaman comes days after he pushed his party in Kerala to shift its long-held ideological position, proposing the restructuring of loss-making public sector undertakings (PSUs) in the state by bringing in private investment, which always been a red rag for the communists.

Vijayan also mooted plans for additional mobilisation of resources to overcome what his party had earlier called an “economic siege” allegedly imposed by the central government.