Is Congress govt mulling mortgaging govt lands to raise funds for loan waiver?

The Congress government is facing significant challenges in implementing the promised loan waiver for farmers. To address this, it is exploring various options such as halting payments to contractors, temporarily suspending welfare schemes like pension payments, and mortgaging government lands. 

It is reported that, recently, a decision was made to transfer 400 acres of land belonging to the Industries Department. Reports indicate that the government expects to raise Rs. 10,000 crores by mortgaging lands to private finance companies. Prime locations such as Kokapet and Raidurgam have been identified for this purpose. Industry sources suggest that the open market value of these lands could be up to Rs. 20,000 crores.

The Telangana State Industrial Infrastructure Corporation (TGIIC) had already planned to raise Rs. 5,000 crores by mortgaging these lands. Tenders were called for a merchant banker on the 23rd of last month, but they were canceled after ten days due to ‘technical reasons and errors’. 

Financial analysts have warned that even if Rs. 5,000 crores are raised, it will not suffice to complete the loan waiver. If the entire amount is spent on the waiver, it will become challenging to run the state from September onwards. Consequently, the government has decided to collect more funds through mortgaging. New tenders have been called recently with the aim of raising Rs. 10,000 crores. Of this, Rs. 5,000 crores are planned to be collected by August 15 for the loan waiver, with the remainder by the end of September.

Officials have estimated that Rs. 31,000 crores will be required for the loan waiver. It is reported that Rs. 20,000 crores are being secured through loans, with plans to raise the remaining Rs. 10,000 crores from the state’s income. To achieve this, payments amounting to Rs. 600 crores to Gram Panchayats and urban local bodies, along with contractors’ bills, have already been halted. There is criticism that pensions have not been paid for two months.

The Congress government has already taken nearly Rs. 28,000 crores in debt. With the additional loan for the loan waiver, this figure is expected to rise to around Rs. 50,000 crores.