CM Reddy claimed that the BRS raised loans for "non-earning" Kaleshwaram and Mission Bhagiratha projects with assurance of repayment through earnings.
Published Dec 20, 2023 | 3:36 PM ⚊ Updated Dec 20, 2023 | 3:54 PM
Telangana Chief Minister Revanth Reddy. (X)
In a trenchant attack on the erstwhile BRS government, Telangana Chief Minister A Revanth Reddy on Wednesday, 20 December, said that it had raised loans for Kaleshwaram Lift Irrigation Scheme (KLIS) and Mission Bhagiratha by misleading financial institutions with claims that the repayment of loans would be made by revenues earned from the two projects.
Intervening in a debate on the whitepaper on the state’s finances tabled by Deputy Chief Minister Mallu Bhatti Vikramarka in the Telangana Assembly, Revanth took objection to former finance minister T Harish Rao saying that the current government was showing bloated debt figures by including off-budget borrowings under the state debt.
Earlier, Harish Rao had said that the whitepaper, which had been prepared by officials of the Finance Department who were suspended by the previous BRS government, included loans availed by corporations under the debts of the state government, while admitting that the said corporations would repay their loans.
Revanth Reddy alleged that the BRS government raised the loans for the two projects through two corporations it had floated so that the loans would remain off-budget.
At the time of the raising of the loans, the corporations were made to give an undertaking to the financial institutions that they would repay the loans from the revenue of the two projects, he said.
The chief minister said that Harish Rao, who was the irrigation minister between 2014 and 2018, must be aware of how the corporations were made to give false undertakings to the financial institutions.
He said: “For the construction of Kaleshwaram, the corporation that was to take up its construction sought a loan of ₹97,449 crore, of which the financial institutions sanctioned ₹79,287 crore.”
The chief minister claimed: “The corporation gave an undertaking to the financial institutions that it would raise ₹5,199 crore per year by selling water from the Kaleshwaram project. A similar undertaking was given by the Mission Bhagiratha corporation that it would repay the loan from the revenue from it, which it estimated at ₹5,706 crore.”
He alleged: “This is nothing but misleading financial institutions to raise loans for the two projects to keep them hidden from the state debt burden.”
Earlier, Prohibition and Excise Minister Jupally Krishna Rao, who intervened while Harish Rao was speaking, asked how the BRS government intended to repay the loans raised by the corporations for Kaleshwaram and Mission Bhagiratha, as they were not earning any money on them.
As it was the state government that should repay the loans because these were not revenue-generation projects, it was natural that the finance minister should include the debts of Kaleshwaram and Mission Bhagiratha under the state’s debt.
Earlier, Harish Rao, initiating the discussion on the whitepaper, said it was a tissue of white lies.
He said: “It appears to be part of the exercise of the state government to escape from the responsibility of honouring the guarantees the Congress promised to the people in the run-up to the Assembly elections.”
He said the state government appeared bent on showing that the state’s economy had derailed under the BRS government at a time when several institutions had praised Telangana as one of the best economies in the country.
By claiming that the state’s finances had taken a hit in the previous government, the current government was eroding the name of Telangana, which the BRS government had built painstakingly, he said.
“This will result in poor inflows of investments into the state. The interest rates on loans that the state can raise under the Fiscal Responsibility and Budget Management Act would increase. Even the state government’s bonds would have less demand,” he said.
The former finance minister said that the state, which was in a deplorable condition at the time of the bifurcation, became a strong and vibrant economy under the leadership of former chief minister and BRS chief K Chandrashekar Rao.
Though Covid-19 wreaked havoc for two years, the state’s economy pulled itself together due to the initiatives of the BRS government, he said.
