The Greater Noida authority is neck deep in debt.
The authority took bank loans and spent crores of rupees on acquisition of land from farmers and development activities in Noida Extension.
“The amount that the authority needs to pay back has gone up to Rs. 5,500 crore. We are paying hundreds of crores of rupees per month only as interest,” said a senior official.
Explaining the financial crisis, the official said that the authority allotted land to builders through auction on payment of only 10% of the total amount. Builders have to pay the rest in installments over the next 10 years. “Since construction is halted and there are no new flat bookings, builders have stopped paying installments to the authority.”
“We desperately hope Greater Noida’s master plan is cleared by the NCR planning board soon and cash flow starts again,” he said.
The Allahabad high court in October last year asked the authority to pay 64% additional compensation and 10% share in developed land to farmers. This means the authority has to pay increased compensation worth Rs. 9,500 crore to farmers.
“It has to be shared by builders and other allottees. The authority told 95 builders, who launched projects in 38 villages of Greater Noida, including those in Noida Extension, asking them to deposit an additional sum of Rs. 1,750 crore for the land already allotted to them. But halting of construction activities has stopped the cash flow,” he said.