No Chance of 20000 Crore Loan for GHMC?

Telangana Chief Minister K Chandrasekhara Rao and his son, Municipal Minister, K Taraka Ramarao are repeatedly saying that Hyderabad needs 20000 Crore to transform the city into a global city by providing better civic amenities and world class infrastructure facilities. Obviously, GHMC can not afford to go for such huge debt and so the government announced that the state government would give guarantee for GHMC to borrow.

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But then it may not be as easy as KCR or KTR thinks. The government has so far given guarantees to 22 institutions, which together borrowed Rs 26,140 crore. The state government has to pay 365 crores towards payment of interest. Despite several requests from the financial institutions, the state government is yet to decide to pay a part of the principal and interest of these loans.

Given this situation, the possibility of them lending 20000 crores to a single institution like GHMC is almost unlikely. Also, the state government is already utilizing its full FRBM limit every year to raise loans so the financial institutions are very cautious to give loans on the state government guarantee.