The government of India has said that it will consider loan reduction, after the Telangana government completes the Kaleshwaram project.
It said that by loan reduction and re-scheduling, the Kaleshwaram account will be downgraded from standard to sub-standard as per RBI guidelines.
The question of loan reduction was put forth by Telangana Congress MP Chamala Kirankumar Reddy in Lok Sabha. Union Minister of State for Finance, Pankaj Choudhary, gave a written reply to the question.
We got requests from the Telangana government to rearrange the Kaleshwaram project loans. For project’s special purpose vehicle, loans were given by Power Finance Corporation and Rural Electrification Corporation.
Non-banking institutions like PFC and REC procure funds in various ways. Based on their expenses, they decide on the loan rates.
Already, REC had extended the completion of Kaleshwaram project date to December 2024. We will consider reduction on loan rates after the completion of the project, the finance ministry said.
This is a setback to Telangana Congress government at a time when Kaleshwaram commission called the lift irrigation project a failure.
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