Part XIII: World Bank Loans Exposed in Parliament: Maharashtra Still Can’t Explain Why It Ignores Cheaper Domestic Options

The borrowing discipline the State applies only when the World Bank forces it

For the first time, the Union Government has placed on the floor of Parliament the full scale of Maharashtra’s dependence on foreign loans. World Bank, ADB, AIIB, NDB, IFAD — the entire borrowing architecture is now officially on record.

X: @vivekbhavsar

Mumbai: What the Centre has admitted in writing matches exactly what TheNews21 has been exposing for months.

But even as Delhi accepts the numbers, the State Government’s explanation collapses on one sharp question that still has no answer.

Parliament Puts It on Record: Maharashtra Tops India in Multilateral Borrowings

In a written reply in the Lok Sabha (Unstarred Q.48, December 1, 2025), the Union Finance Ministry disclosed that Maharashtra has the largest foreign loan portfolio in the country — running across 33 World Bank projects, 14 ADB projects, 4 AIIB projects, 2 NDB projects and 5 IFAD projects.

The figures speak for themselves:

• World Bank (IBRD/IDA): USD 6427.4 million (~ ₹53,347 crore)
• ADB: USD 3635.84 million (~ ₹30,177 crore)
• AIIB: USD 1885 million (~ ₹15,646 crore)
• NDB: USD 501 million (~ ₹4,158 crore)
• IFAD: USD 224.76 million (~ ₹1,866 crore)

Total external exposure: ₹1,05,194 crore (≈ ₹1.05 lakh crore).

(At a conservative exchange rate of ₹83 per USD.)

A separate reply in the Rajya Sabha puts Maharashtra’s outstanding EAP (Externally Aided Project) debt at ₹22,734 crore, corroborating the numbers obtained by TheNews21 through RTI.

This is no longer analysis.

This is now official Parliament record.

State’s Economic Advisor Defends the Foreign Borrowings

After these disclosures became public, TheNews21 received a suo motu clarification from Pravin Pardeshi, CEO of MITRA and Chief Economic Advisor to CM Devendra Fadnavis.

According to Mr Pardeshi, Maharashtra turns to World Bank and ADB loans because Open Market Borrowings (OMB) get consumed by routine expenditure:

“Open market borrowing goes into salaries, pensions, subsidies, drought relief, calamities, interest payments and Pay Commission revisions. These are unavoidable.

World Bank, ADB and AIIB loans can only be used for asset creation and institution building. They directly increase GDP and reduce poverty.”

He added that the State has already exhausted domestic borrowing routes for capital works:

“We have arranged ₹15,000 crore from NABARD for irrigation and ₹15,000 crore from domestic banks for infrastructure like the Samruddhi Highway. Domestic borrowing for investment is fully leveraged. Multilateral loans fill that gap.”

But TheNews21’s Question Still Remains — And It Has Not Been Answered

Mr Pardeshi explains why Maharashtra uses foreign loans.

But he avoids the core issue raised by this investigation:

If World Bank loans can be strictly ring-fenced for specific projects, why can’t Maharashtra enforce the same financial discipline on loans taken from Indian banks?

This single question exposes the larger contradiction in the State’s borrowing model.

Three Contradictions the State Cannot Ignore

1. The State claims domestic borrowings get diverted to salaries and subsidies.

Diversion does not happen automatically. It happens because the government chooses not to ring-fence domestic loans.

2. Ring-fencing is not a foreign idea — it is a budgeting discipline.

You can assign cost centres, create escrow accounts, verify end-use and restrict diversion.

Nothing stops Maharashtra from applying the same discipline to NABARD or Indian Bank loans.

3. If discipline is possible only when the World Bank demands it, what does that say about Maharashtra’s own fiscal governance?

This question remains untouched.

Is This Dependence or a Lack of Discipline?

If Maharashtra enforced its own ring-fencing, transparency and utilisation rules for domestic loans:

• The State could build capital assets without foreign currency risk
• Lifetime project costs would not escalate by 30–60%
• No commitment charges would bleed money on unspent balances
• External agencies would not be required to police utilisation

But what the government has normalised is the opposite:

• Domestic loans are “flexible” — and therefore diverted
• World Bank loans are “disciplined” — because someone else enforces the rules

That is not a financial compulsion.

That is an administrative choice — and an expensive one.

Parliament Has Spoken. Experts Have Spoken. But the Fundamental Question Stands.

TheNews21’s investigation has now reached three tiers: 

Documentary evidence: Annexures, RTI replies, 

Political acknowledgement: Parliament

Expert defence: State’s economic advisor

But what remains unanswered is the heart of the matter:

Why must Maharashtra outsource financial discipline to the World Bank?

Why can’t the State impose the same discipline on domestic loan and escape the long-term foreign debt trap?

Until this question is answered, the debate is not about numbers anymore.

It is about governance, control and fiscal responsibility.

This is no longer merely a financial story.

It is a governance story.

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

Also Read: Maharashtra’s World Bank Loan Trap: What Delhi Admitted

Also Read: Maharashtra’s World Bank Loan Trap – Debt Dressed as Development 

Also Read: Maharashtra’s World Bank Loan Trap –The Politics of Accountability