Krishna defends WB loans

Former Karnataka chief minister S M Krishna has strongly defended raising loans from the World Bank and other financial institutions (FIs) for infrastructure development in the state during his tenure.

Stating that massive investments is the only way to tackle infrastructure problems in the city, Krishna informed mediapersons that the previous Congress government had raised loans amounting to Rs 30,000 crore for programmes that created tangible assets for the state.

Referring to the recent questions raised by the current deputy chief minister Siddaramaiah in the state legislature on the loans raised by the previous government, Krishna said, "We had borrowed the funds from these agencies to improve the road infrastructure in the rural and urban areas. We have invested about Rs 14,700 crore on irrigation projects alone to expand the agricultural base in the state. Hence, it would be incorrect to say the state is now overburdened with debts. In fact, I had justified on the floor of the house the rationale in raising the loans by giving a comparative study of assets created and how funds were utilised in the neighboring states like Andhra Pradesh, Tamil Nadu, Kerala and Maharashtra."

Pointing to the recent medium term fiscal plan (MTFP) for 2004-2008, which was tabled on the floor of the Legislative Assembly, Krishna said the government is capable of paying back the loans as scheduled from the revenues it collects annually.

"It will be wrong to assume that the state government is overburdened with such debts. Karnataka has the distinction of keeping up its commitment to service its debts in time. The state has never defaulted. I promise the people of the state that they need not be alarmed over the debts the state had incurred during our tenure. Unlike other states, especially Maharashtra, Karnataka is in a comfortable position to manage its finances," Krishna said.

Krishna said he had introduced for the first time in the state the medium and long-term fiscal plans.