State cabinet approves Rs 822 loan crore to CSMC

Lokmat News Network

Chhatrapati Sambhajinagar:

In a positive development, the state cabinet in its meeting today approved a soft loan of Rs 822.22 crore to the Chhatrapati Sambhajinagar Municipal Corporation (CSMC) by Hudco under Maharashtra Urban Infrastructure Development Loan Scheme (MUIDLS).

The loan amount will be invested in the form of CSMC’s share in the new water supply scheme. The water scheme of valuing Rs 2,740 crore has been approved by the Central Government under Amrut 2.0 and monetary share of the State Government is 45 per cent; Central Government - 25 pc and CSMC - 30 pc.

Later on, the water works started with the funds released from the Central and the State Government to the tune of Rs 1300 crore, but the cash-strapped CSMC was unable to put its share. Later on, the governments and the superiors in administration took cognizance of the issue and told to put the share. However, the municipal commissioner G Sreekanth insisted the state government grant special funds to CSMC for it, but was in vain. Later on, the civic chief urged the state government to contribute the share on its behalf in the water project, but the state government tricked saying it will provide a soft loan from Hudco to cover the share and directed CSMC to repay it. The civic authority tried his level best, but the state government was firm, saying its decision would prompt other municipal corporations in the state to do the same.

Earlier, the state cabinet okayed granting of loan of Rs 822 crore to CSMC in June 2025. The cabinet decided that it will provide government guarantee to Hudco and also waive off the guarantee fee for it. Today it approved granting of loan through Hudco to cover the CSMC’s share in the project.

It may be noted that under the MUIDLS, the loan of Rs 2,000 crore has been approved today. Apart from CSMC, the loan of Rs 268.84 crore has been sanctioned to Nagpur Municipal Corporation and Rs 116.28 crore to Mira-Bhayendar Municipal Corporation.

According to CSMC sources, “The municipal corporation will have to deposit an installment of Rs 20 crore and repayment of the loan would start after two years. If there is a delay in depositing installment, the state government may deduct the amount from the GST share or Finance Commission funds.”