The State Government has intensified its efforts to reduce the financial burden on account of payment of interest and principal for loans obtained by the previous BRS government.
Irrigation Minister N. Uttam Kumar Reddy’s directive to the officials concerned to look out for long term loans for reducing the interest burden is indicative of the government’s efforts to ease pressure on account of payment of principal and interest for the loans obtained by the previous government. The concern stems from the fact that the previous government raised part of loans with interest rates ranging from 8.25% to as high as 10.9%, especially for the loans obtained from the Power Finance Corporation and Rural Electrification Corporation.
The Comptroller and Auditor General of India (CAG), in its State finance audit report, said project cost of Kaleshwaram is likely to exceed ₹1.47 lakh crore as against the ₹81,911 crore projected to the Central Water Commission and the capital cost of irrigation works out to ₹6.42 lakh an acre. The Kaleshwaram Irrigation Project Corporation Limited, in a reply to a query under RTI recently, said the State had so far repaid ₹22,511.98 crore interest and principal of ₹8,324.96 crore.
The government is still to pay principal of ₹63,388.71 crore and the interest component is pegged at ₹43,883 crore taking the total to ₹1.07 lakh crore. This would mean that the government should set aside almost ₹10,000 crore every year for the next 10 financial years for repayment of principal and interest of loans obtained for the Kaleshwaram project alone leaving aside loans obtained by other corporations with the State government’s guarantee.
The government obtained high interest loans of over 10% from the PFC and REC with repayment of majority of the loans ending by 2035, according to the information given by the corporation. While Chief Minister A. Revanth Reddy has expressed concern more than once over the interest burden on the government, Mr. Uttam Kumar Reddy has visited the national capital more than once seeking the Finance Ministry’s consent for rescheduling of the loans so that the State could withstand the pressure on its finances.
The State is already saddled with financial burden in the form of its six guarantees which it has started implementing and had been struggling to raise finances for meeting its financial commitments.
Published - October 15, 2024 09:41 pm IST
