Maharashtra’s World Bank Loan Trap: What Delhi Admitted

By
Vivek Bhavsar
-
31
314

Delhi admits it: Maharashtra alone bears every rupee of repayment, interest, and hidden charges.

X: @vivekbhavsar

Part X – The Ministry’s Own Words

For months, this series has exposed how Maharashtra’s World Bank loans, marketed as “cheap,” turned into a fiscal treadmill of repayments, interest, and hidden charges. Critics could argue this was interpretation. But now comes the clinching evidence — the Government of India itself admits the burden.

In response to an RTI filed by TheNews21, the Ministry of Finance’s Department of Economic Affairs has confirmed:

  • Repayments, interest, and commitment charges on all external sovereign loans from 2000–01 to 2025–26 are recorded and enclosed in Annexures C1–C4, D1–D4, and E1–E4.
  • Terms & conditions of external agencies (Annexure B) are acknowledged as binding, including commitment charges of 0.10–0.25% p.a. on undisbursed balances.
  • 12th Finance Commission rule (2005 onwards): loans to states are “back-to-back” — meaning repayment is routed via RBI but entirely recovered from the state government, not the Centre.
  • World Bank (IBRD & IDA) loans are explicitly clarified as being part of this mechanism.

In short, Delhi admits:

  • These loans are not Centre-backed subsidies; they are state liabilities.
  • Commitment charges and interest are unavoidable and systematically recorded.
  • Maharashtra’s burden is officially documented — not disputed, not deniable.

Why This Reply Matters

  1. Legitimacy: Every figure we reported is grounded in official annexures enclosed by the Ministry itself.
  2. Accountability: The Finance Ministry acknowledges that repayment is recovered fully from states, ending the myth that “Delhi shares the burden.”
  3. Transparency vs Reality: The RTI shows the Government’s books contain every hidden charge — but these never find mention in glossy press releases about “cheap development finance.”

A Sentence Worth Noting

The Ministry writes:

“As per the recommendation of the 12th Finance Commission… rupee equivalent would be recovered by Government of India from the concerned State Government… applicable for all agreements signed on or after 1st April 2005.”

Translation: Maharashtra takes the loan, Delhi signs the deal, but the state alone pays the price.

Also Read: Maharashtra’s World Bank Loan Trap: Hidden Costs Bleeding the State

Also Read: Maharashtra’s World Bank Loan Trap: The True Cost of Borrowing

Also Read: Maharashtra’s World Bank Loan Trap: Case Studies of Costly Projects

Also Read: Maharashtra’s World Bank Loan Trap: The Escalation Over Two Decades

Also Read: Maharashtra’s World Bank Loan Trap: Policy Questions & The Way Forward

Also Read: Maharashtra’s World Bank Loan Trap: “Climate Project or Cash Drain?”

Also Read: Maharashtra’s World Bank Loan Trap: Paying for Nothing

Also Read: Maharashtra’s World Bank Loan Trap: The All-In Cost

Also Read: Maharashtra’s World Bank Loan Trap: The Fine Print That Bled the State










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