COIMBATORE: Coimbatore Corporation feels relieved that a substantial loan burden will be removed because of the waiver announced by Local Administration M.K. Stalin recently. The Government is to waive Rs. 793 crore loans given to various local bodies to at least partly solve their financial problem.
Mayor R. Venkatachalam says the Corporation will benefit by a waiver of Rs. 63 crore it owes the Government. The waiver is very timely, given the huge financial commitment the Corporation faces in implementing major infrastructure schemes over the next five years.
"The Corporation had got Rs. 40 crore loans since 1970 from various funding agencies, including the Life Insurance Corporation of India, for various development activities. Along with an accumulated interest of Rs. 23 crore, the repayment burden as on date is Rs.63 crore," he says. "We were struggling to repay since then. In 1998 the State Government took over the loans from the funding agencies and we were making the repayment to it since then," he says. The Government has now taken upon itself the task of absorbing the cost of the waiver to enable the local bodies to come out financial constraints, he points out.
The Mayor says the waiver is a big benefit, but not to the extent of diverting that much funds (Rs.63 crore) for development works. "We have not had this money for sometime even to repay the loans," he says. But the Corporation can go in for more loans if it can afford to now, because the waiver indirectly enhances its eligibility.
"Till now fresh loans have been difficult to obtain because of the repayment commitment already on hand. When we need not pay Rs. 63 crore, we will be seen as having some capacity to repay fresh loans that we need for more works," the Mayor says.
There is, however, no scope of getting the Rs.79.50 crore arrears to the Tamil Nadu Water Supply and Drainage Board waived, as the Corporation owes this money to the board in maintenance and water charges. But this was mentioned to Mr. Stalin during his recent visit to the city.