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EMI debt trap sits heavy on Kota hostel owners

Kota’s hostels are now a pale shadow of the heydays after the COVID brought the coaching hub to a grinding halt.

Published: 10th September 2020 10:29 AM  |   Last Updated: 10th September 2020 10:29 AM   |  A+A-

Kota, the coaching hub of India, has nearly 3,000 private hostels.

Kota, the coaching hub of India, has nearly 3,000 private hostels. (Photo | Maqsood Ahmad, EPS)

Express News Service

JAIPUR: Once teeming with students from across the country, Kota’s hostels are now a pale shadow of the heydays after the COVID brought the coaching hub to a grinding halt. 

While coaching centres are somehow surviving through online classes, the macro economy involving hostels is severely hit for the last six months. And majorly hit are owners of nearly 3,000 private hostels, many of which were built by availing loans from banks. 

The monthly instalments were met through rents. But the sudden closure of coaching institutes in March marked the beginning of bad days for hostel owners. Reminders for payment of dues from banks only add to their anxiety.

“I used to have monthly income of Rs 5-6 lakh out of which Rs 3.5 lakh were allotted for EMIs. I am hardly earning anything now and have to spend Rs 30,000-40,000 per month on each hostel for maintenance. Banks have started asking EMIs and its creating a grim situation for us if the moratorium dates are not extended,” says Sunil Agarwal, owner of two hostels with 65 rooms each.

Agarwal, the president of Coral Park Hostel Association, had taken loans from a bank last year to construct the hostels. Rough estimates suggest that almost 80% of the hostel owners are trapped in loan cycle.

Many are forced to sell off hostel accessories to make two ends meet. Hostel Association former general secretary Pankaj Jain says disputes have started surfacing and the Association have settled 135 such disputes between hostel owners and lease holders.

“We have submitted a memorandum to the Union Finance Minister and the Lok Sabha Speaker Om Birla, our local MP. We have demanded that moratorium on loans should be extended till March for enabling us to repay bank loans without facing crisis.”

It is estimated that nearly two lakh students arrive in Kota every year fuelling a Rs 2,000 cr macro economy of which hostels are an integral part of allied services. But with coaching classes falling silent due to the pandemic, old-timers fear the return of insecurity that had once gripped this small city in Rajasthan when manufacturing units started shutting shops in the late 1990s. 



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