Advanced Search
MyIDEAS: Login

The Asian Development Bank loan for Kerala (India): The adverse implications and search for alternatives

Contents:

Author Info

  • K. Ravi Raman

    (Centre for Development Studies)

Registered author(s):

    Abstract

    The privileging of internal resources over external finance is not only the most democratic but also the most politically desirable option. The implications of the ADB loan for Kerala is situated against this premise by employing an empirical political economy method. The paper is divided into five sections. In section 1, along with the structure of the loan, the current status of state finance is briefly outlined. Section 11 explores two hypotheses: the Resource Mobilisation Crisis Hypothesis and the Debt Overhang Hypothesis. In section 111, the socio-political implications of the ADB loan are discussed in the context of the conditionalities imposed. In section IV, viable alternatives are analysed with special emphasis on internal resource mobilisation and section V summarises observations. It is pointed out that the debt sustainability in Kerala was foreclosed by the late 90s with the state is in debt overhang. The ADB loan would only be an attack on the fiscal health of the state. Moreover, the class bias of the state blinds it to encrypted sources of funds which in Kerala help foster social structures of accumulation, leading to what could be called a state-`augmented/patronised' fiscal crisis. If the Kerala government were to adhere to ADB-driven governance, it would culminate in social de-investment, "commodification" of critical sectors such as education and health and thereby a reversion of whatever remains of the Kerala model of social development; vulnerable social sections being the hardest hit. Although the state has accepted the first tranche, it could just as well withdraw totally from the ADB package. What is required is a concerted effort towards an internal resource mobilisation which would liberate the state from its commitment to the high-conditionality ADB loan. A mere 20 per cent or less of the locked up funds/arrears would save the state from seeking the second tranche. The state would be well advised to first stop further borrowing from the ADB and to dispense with the ADB policy package, and, second, to renounce the path of externally-driven neo-liberal reforms.

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL: http://www.cds.edu/wp-content/uploads/2012/10/wp357.pdf
    Our checks indicate that this address may not be valid because: 404 Not Found. If this is indeed the case, please notify (Shamprasad M. Pujar)
    Download Restriction: no

    Bibliographic Info

    Paper provided by Centre for Development Studies, Trivendrum, India in its series Centre for Development Studies, Trivendrum Working Papers with number 357.

    as in new window
    Length: 78 pages
    Date of creation: Mar 2004
    Date of revision:
    Handle: RePEc:ind:cdswpp:357

    Contact details of provider:
    Postal: Peasanth Nagar, Trivandrum 695 011, Kerala
    Phone: +91 471 2448 881
    Fax: +91 471 2447 137
    Email:
    Web page: http://www.cds.edu
    More information through EDIRC

    Related research

    Keywords: Asian Development Bank; Fiscal deficit; Debt overhang; Resource mobilisation; Social structures of accumulation; India;

    Find related papers by JEL classification:

    This paper has been announced in the following NEP Reports:

    References

    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
    as in new window
    1. Jeffrey D. Sachs, 1989. "Conditionality, Debt Relief, and the Developing Country Debt Crisis," NBER Chapters, in: Developing Country Debt and Economic Performance, Volume 1: The International Financial System, pages 255-296 National Bureau of Economic Research, Inc.
    2. Jeffrey D. Sachs, 1989. "Conditionality, Debt Relief, and the Developing Country Debt Crisis," NBER Chapters, in: Developing Country Debt and the World Economy, pages 275-284 National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as in new window

    Cited by:
    1. R. Mohan, 2010. "Taxing Powers and Developmental Role of the Indian States: A Study with Reference to Kerala," Working Papers id:2997, eSocialSciences.

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:ind:cdswpp:357. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Shamprasad M. Pujar).

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.