The southern state’s chief minister Pinarayi Vijayan said on Tuesday that the loan would be part of a special package from central government. The Kerala state has estimated the suffered damage worth at least 200bn rupees.

Kerala will also ask prime minister Narendra Modi’s government to raise its borrowing ceiling to 4.5% of its GDP from 3%, Reuters reported.

This would help to raise an additional 105bn rupees from the market, Vijayan said.

The minister told reporters: “Our aim is not merely a restoration of the state to pre-flood times, but the creation of a new Kerala.”

The flood was the worst in the state in a century. It took 383 lives, destroyed tens of thousands of homes and washed away roads and bridges. Around 1.3 million people are sheltering in relief camps.