Once a profit-making body, the Greater Mohali Area Development Authority (GMADA)’s finances have slipped into the red, with profits going from ₹68 crore in March 2021 to ₹38 crore in March 2022.
The value of GMADA’s assets also fell by around 11% -- from ₹5,660 crore to ₹5,000 crore during this period.
What’s adding to the distress is the fact that the Authority is paying ₹270 crore a year as interest on loans it has taken from various public and private banks. As per records, GMADA has taken loans to the tune of ₹3,750 crore over the past decade for land acquisition.
A senior GMADA official said, “Though we have taken loans, we have also created assets in all these years. The loan was taken to acquire land for Aerocity, Eco-city in New Chandigarh, IT city and infrastructure development. Also, the loans have been taken at a minimum interest rate of of 6.5 % to 6.75 %.”
GMADA had even mortgaged several of its properties, including big chunks of land, to avail heavy amounts of loans and overdrafts. With its own coffers empty, the development authority had even resorted to taking further loans to repay the previous ones.
{{/usCountry}}GMADA had even mortgaged several of its properties, including big chunks of land, to avail heavy amounts of loans and overdrafts. With its own coffers empty, the development authority had even resorted to taking further loans to repay the previous ones.
{{/usCountry}}Records also show that the Authority has been struggling to pay the hefty monthly installments, running into several lakhs.
GMADA chief administrator Amandeep Bansal said, “We have planned to auction properties, complete pending projects so as to cash the investments and curtail future expenditure to consolidate the financial position. Our fund has been deposited in fund enhancement account.”
In the past two years, GMADA has earned around ₹1,000 crore after auctioning big properties.