Maharashtra to float Rs 1,000cr bonds

Maharashtra is all set to float bonds worth around Rs 1,000 crore to fund irrigation projects. The state Cabinet is likely to give its nod for the same before the end of this fiscal, sources in the finance ministry said.

It is estimated that the state would require around Rs 30,000 crore over the next five years to complete the projects. It had, therefore, decided to fund the projects equally through budgetary allocation and bonds.

Accordingly, the state legislature last year passed a resolution directing the government to raise Rs 16,000 crore through bonds for irrigation projects as it felt it could allocate only Rs 3,500-4,000 crore from the Budget every year.

But, with the economy booming and revenues increasing, the government now feels it can provide a higher fund from the Budget. "We are now in a position to provide around Rs 5,500 crore from the Budget. Hence, we require only about Rs 1,000 crore through bonds," they said.

Though the government has reduced the amount to be raised through bonds, this still brings back the haunting memories of the BJP-Sena government's decision to raise Rs 7,500 crore through high-cost bonds. This decision virtually put the state in a debt trap as the government's expenditure on debt servicing increased to around 20 per cent of the budgetary outlay.

Besides, MLAs from the backward regions like Marathwada, Vidarbha, and northern Maharashtra have opened a common front against the excessive allocation to irrigation projects to western Maharashtra or Krishna valley.