TO FUND PENDING PROJECTS, GOVT TO BORROW RS 8,000 CR AGAINST POWER SALE RECEIPTS

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TO FUND PENDING PROJECTS, GOVT TO BORROW RS 8,000 CR AGAINST POWER SALE RECEIPTS

The move comes after banks conveyed to the state government that norms don’t allow them to advance loans against budgetary commitments.

Srinagar: The state government is borrowing Rs 8,000 crore to fund languishing infrastructure projects against receipts generated by the power development department from the sale of power.

The newly-established J&K infrastructure development finance corporation (JKIDFC) has guaranteed repayment of loan through pledging of revenue receipts of the PDD from the sale of power.

The repayment of principal (amount) and interest shall be made by the corporation directly from the designated account for power sale proceeds, which the corporation will debit for repayment as per schedule,” reads the expression of interest (EoI) invited by JKIDFC on January 14 for advancing loans up to Rs 8000 crore within two to three years.

The move comes after banks conveyed to the state government that norms don’t allow them to advance loans against budgetary commitments.

Earlier, the state government had maintained that repayment of the loan would be ensured through budgetary provisions in the annual financial statement.

“The loan to be raised by the would-be corporation will be guaranteed by government of Jammu and Kashmir and repayment of principal amount and interest will be secured and ensured by appropriate budgetary provision for the purpose in the annual financial statement  of the state,” read the EoI invited by the finance department  on September 15 last year.

When contacted, principal secretary finance Navin Kumar Choudhary said, “It is the discretion of the government how to arrange funds for repayment of the loan. It shouldn’t be your concern”.

Director, finance, JKIDFC, Showkat Ahmad Mir refused to comment on the issue.

After the imposition of governor’s rule, the state administrative council (SAC) in September last year approved the establishment of JKIDFC to complete all languishing projects in the state.

The corporation has been authorised to raise a loan of Rs 8,000 crore from various financial institutions, including state and nationalised banks, for completion of these unfunded projects.

These developmental projects, which are at different stages of execution, are either inadequately funded or have been left incomplete due to one or the other reason. Some of them have been languishing for over five years, resulting not only in blocking of funds spent on them but also in cost escalation and time overruns.

A tentative assessment by the planning, development and monitoring department indicated that incomplete projects worth over Rs 10,000 crore were at various stages and that over Rs 6,000 crore would be required to complete all of them in one go.

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