The Telangana government has stepped in to provide significant financial relief to the Greater Hyderabad Municipal Corporation (GHMC) by deciding to take over its liabilities amounting to Rs 5,000 crore. This move is expected to transform the debt-ridden civic body into a fiscally stronger entity.
Debt Accumulation and Projects
A majority of these liabilities were incurred while executing major urban infrastructure projects, including flyovers under the Strategic Road Development Programme (SRDP), the Comprehensive Road Maintenance Programme (CRMP), stormwater drain works, and other urban development activities. The GHMC has been grappling with a debt burden of Rs 4,800 crore, paying approximately Rs 180 crore each month towards principal and compound interest to various financial institutions.
The civic body accumulated these debts through municipal bonds, rupee term loans, and borrowings from financial institutions, with a significant portion allocated to the construction of flyovers and underpasses.
Official Statement
Jayesh Ranjan, special officer for three municipal corporations, stated: "After reviewing the debts, liabilities and assets, it was recommended that the state government assume these long-pending financial obligations. This move is aimed at easing the burden on the newly formed corporations. The state is expected to clear these debts by the end of this year."
Trifurcation and Revenue
Earlier, there was a proposal to divide the debt among the Greater Hyderabad Municipal Corporation (GHMC), Cyberabad Municipal Corporation (CMC), and Malkajgiri Municipal Corporation (MMC) based on the geographical location of projects and loan utilisation. Before the trifurcation, the erstwhile GHMC generated annual revenues of approximately Rs 4,000 to Rs 5,000 crore through sources such as property taxes, town planning fees, trade licence fees, advertisement revenue, estate income, and mutation charges. Of this, nearly Rs 700 crore per year was allocated towards loan repayments.
This strategic move by the state government is expected to provide much-needed fiscal stability to the GHMC and its successor corporations, enabling them to focus on further urban development without the overhang of heavy debt.
