Cabinet okays Rs 2,731 cr for tsunami-hit

The Cabinet today approved a package of Rs 2,731.04 crore comprising loans and grant for rehabilitation and reconstruction programmes in the tsunami-hit areas of Tamil Nadu, Andhra Pradesh, Kerala and Pondicherry.

A package for the Andaman and Nicobar islands will be finalised after Agriculture Minister Sharad Pawar's tour of the affected islands.

Finance Minister P Chidambaram told reporters after the meeting that package cleared by the Cabinet was the first tranche of relief and the second phase, to be announced shortly, would cover areas like agriculture and infrastructure.

"The first phase of relief covers the recovery of agricultural land, salinity and reconstruction of buildings," Chidambaram said.

He also said money was not a constraint and the government was not putting any cap on funds. As and when any proposal came from the affected states, the government would consider them, he said, adding that the government would accept multilateral assistance as a long-term measure.

The government is negotiating with the World Bank, the Asian Development Bank, the United Nations and the European community. Multilateral assistance will be used for financing infrastructure related activities in the affected areas.

Of the package cleared today, Rs 861.82 crore will be given for immediate relief and temporary rehabilitation assistance. The fisheries sector has been allocated Rs 1,093 crore, while Rs 22.13 crore has been provided for fishing harbours.

Out of this, Rs 454.47 crore will be given as subsidy, while Rs 639.24 crore will be given by way of loans. Rehabilitation measures for the sector would include loans and grants for fishermen who lost their vessels and reconstruction of fishing harbours, Chidambaram said.

An estimated 170,500 houses had been damaged because of the tsunami and a special package of Rs 752.30 crore, including the cost of land, has been sanctioned. Chidambaram said the total expenditure would be treated as central grant.

Under the Central Road Fund and the National Calamity Contingency Fund norms, which have been relaxed by the high-level committee only two days ago, Rs 861.82 crore is being given for immediate relief measures. This component includes Rs 450 crore, which has already been released.

The package was short of Chief Minister J Jayalalithaa's demand of Rs 4,500 crore for Tamil Nadu alone. This demand was made to Prime Minister Manmohan Singh when he visited Tamil Nadu.

The package is interesting, for the Tamil Nadu government -- the state that has been hit the worst -- has itself scaled down its requirements in some areas and has sought more relief in certain others.

The total capital subsidy provided will be Rs 356.54 crore and the loan component will add up to Rs 566.47 crore.

Interestingly, the Tamil Nadu government has revised its estimate of the damage caused. Instead of 4,000 mechanised boats and 33,000 other boats to be replaced, the revised figures provided by the state are 2655 mechanised boats and 41523 other boats.