VIJAYAWADA: Refuting the allegations of Opposition parties that raising funds through Amaravati Bonds will put an additional burden on the government, Planning Commission Vice-President C Kutumba Rao has asserted that mobilisation of funds through bonds is beneficial to the State.
He said the Capital Region Development Authority (CRDA) was mobilising funds in all possible ways for continuing the construction works of the capital city with the Centre giving a meagre `1,500 crore and the World Bank delaying sanction of loans. Speaking to reporters at the Interim Government Complex in Velagapudi on Monday, he said interest rate of bonds was based on a rating of an institute.
“The rating will be given after considering income ways and capacity to pay principal amount and interest and some other issues. As we got A Plus rating, we are supposed to pay 10.48% interest, but we will pay 10.32% interest,” he said. The Electricity Corporation with A rating is paying 9.4 per cent interest, while Mission Bhagiratha project is paying 10.5 per cent interest. “For the loans availed of from Hudco,we will have to pay 10.15% interest in the first year, 10.25% in the second year and 10.3% in the third year,” he said, adding that several State governments and corporations are issuing bonds for taking up various works, including that of national highways.
‘World Bank interest high’
Claiming that the interest rate on loans taken from World Bank is not 4 per cent and will be more, he said the difficulties in availing of loans are also more. “We will have to pay 2 per cent additional interest to the Centre for getting the loan from World Bank for giving the guarantee,” he said and observed that there will also be foreign currency problem. “If the value of foreign currency increases, we will have to bear the additional burden,” he said.