Mumbai: Four days after announcing a loan waiver of Rs34,022 crore, the Maharashtra government is still uncertain about the source of funding and is scouting for ways to raise the money.
The state will seek the central government’s help to direct the Reserve Bank of India (RBI) to allow nationalised banks to lend Rs34,000 crore at 7%-7.5% interest, with a repayment schedule staggered over four years. If it gets this loan, the state plans to repay it through Rs10,000 crore provision in its annual budget for four years. However, if this option doesn’t work out, the state government will have to cut its developmental funds by more than 25% and also raise another Rs16,000 crore through different means to fulfil its promise of a waiver. The central government has already refused any financial aid to the state to write off the loans. Significantly, the state finance department had cautioned the government that raising funds would be difficult if the loan waiver amount went beyond Rs15,000 crore.