[1]In a clear indication that the BBMP is finding it hard to raise resources, the cash-strapped Palike council on Tuesday approved a resolution, amid acrimony, to avail a Rs 1,000 crore loan by pledging two of its prime properties — the Public Utility Building (PUB) and Jayanagar Shopping complex.
Replying to opposition Congress and JD(S) corporators, BBMP Commissioner Shankarlinge Gowda said the money is to restructure BBMP’s loans.
The state government’s approval has been obtained for availing the loans, he said.
“The loan repayment rate, including the principal, is Rs 2 crore per day. BBMP must have Rs 730 crore per annum to service the loan.
But Housing and Urban Development Corporation (HUDCO) is providing a long-term loan with a moratorium of two years.
The two years give BBMP to restructure the loan and carry out certain development works too. The BBMP has potential to repay the loan,” he said.
Earlier, Hanumanthanagar corporator K. Chandrashekar said that as per the fiscal deficit Act, a local self-government body can raise loan only to a maxium of 10 per cent of its budget or 25 per cent of its total revenue. It is not wise to avail such a huge loan before tabling the budget, he said.
Links:
[1] http://archive.asianage.com/untitled-107jpgcropdisplayjpg-170