HYDERABAD: Unmoved by opposition parties’ criticism that it is setting up corporations one for each project only to raise more long-term loans to increase the debt burden, the state government on Thursday set up Telangana Water Resources Development Corporation (TWRDC), a special purpose vehicle (SPV), to “seek and raise” financial support for the ongoing irrigation projects.
The government, in the order issued establishing the SPV, said that it would collect user charges, taxes and surcharges from farmers. That means farmers have to pay user charges to the government which, in turn, will repay the loans taken for construction of the projects.
Orders on floating TWRDC were issued on Thursday and Veeramalla Prakash Rao, one of the close aides of chief minister K Chandrasekhar Rao, was appointed director and chairman of the corporation. The corporation will have a corpus fund of Rs 100 crore. However, the government justified its action, saying that financial institutions would extend loans only to corporations.
“The state has an ambitious plan of constructing irrigation projects and the state budget cannot support these plans. Therefore, TWRDC was floated to raise the required finances,” a source said. The official said the government had to explain how the loans would be repaid to the financial institutions. For this purpose, the government has included a clause that it would collect user charges, taxes and surcharges to repay the loans taken for irrigation projects.
To accomplish the gigantic task of providing irrigation facilities to one crore acres, there is a need to set up a special purpose vehicle (SPV) for raising additional resources supplementing budgetary resources for funding the projects, special chief secretary (irrigation) SK Joshi said in the GO. This development comes after the Congress and the TDP accused the chief minister of pushing the state into a huge debt trap by obtaining long-term loans for each project.
“If the erstwhile state was burdened with a Rs 60,000-crore debt in 60 years, the new state’s debt stands at R 1.2 lakh crore in just two years,” TTDP working president A Revanth Reddy remarked.