KOLKATA: The Centre is keeping a close watch on Mamata Banerjee's plan to get soft loans from Asian Infrastructure Investment Bank (AIIB).

The recent discussion on this topic between Mamata and Chinese Vice-President Li Yuanchao during their meeting at Eco Park has riled the central government up since there are no clear norms for a state to seek overseas loans directly, according to the Indian foreign office.

Officials in Delhi are suspicious about Beijing's move, specially after the recent developments when China replaced India as the sole fuel supplier to Nepal. Nepal Oil Corporation and Chinese authorities signed a deal to bring fuel to Nepal from China ending Indian monopoly. The officials at Delhi are extra cautious as they are trying to read if The Centre is suspiscious that Beijing is trying to meddle into India's inner politics by providing financial aid to Mamata, Modi's bete-noire. Moreover, it is known that Mamata is keen to form a federal front against the Prime Minister.

Bengal had been facing a major financial crisis ever since Mamata took over as CM as the state exchequer had a total outstanding borrowing of Rs 1,98,195 crore in 2010-11. For that Mamata had repeatedly urged the Centre for a moratorium to get rid of the system of paying interests annually. which is over Rs 280 billion from the very first year she took charge as CM. As development projects in Bengal are in the back seat due to the fund crunch, Mamata was visibly relieved after her meeting with Yuanchao.

Mamata and Yuanchao also discussed the proposed Bangladesh-China-India-Myanmar economic corridor, which will connect Kolkata with Kunming in China via Dhaka in Bangladesh and Mandalay in Myanmar.

From Kolkata, the corridor will head towards Bangladesh and passing through Dhaka and Sylhet, will re-enter India near Silchar in Assam. The corridor will be connected with Imphal and pass through India-built Tamu-Kalewa Friendship Road in Myanmar. But there is problem as it enters a small part of Arunachal Pradesh over which India and China have territorial disputes and so Indian officials keeping a vigil on the issue.

Political experts felt that out of desperation Mamata might have approached the Chinese VP for soft loan for launching some new projects before the Assembly polls of 2016. AIIB is basically a Chinese initiative to counter the monopoly of World Bank and Asian Development Bank, though over 50 countries are its members including India. AIIB is expected to start functioning soon. But the sudden approach of Mamata to seek soft loan from the Chinese VP, has left the Indian foreign office clueless. The top officials of ministry of external affairs (MEA) are still not sure if any state can enter into any agreement with a foreign bank for getting soft loan.

MEA officials felt that normally communications are to be routed through the MEA. Even Mamata had requested Chinese VP to send a delegation to Kolkata for a business summit, which MEA officials said that the official request is to be sent through MEA.

