Bhagiratha interest begins to bite

State may need to charge for water after ’19

As Mission Bhagiratha inches towards achieving its target of providing drinking water to every household by December 2017, the state government is faced with the daunting task of making the project financially viable. The government has borrowed from banks for the project, and the interest is mounting.

The estimated cost of Mission Bhagiratha is `43,781 crore, and the government has tied up with banks to borrow nearly `35,000 crore. The balance 20 per cent, nearly `8,760 crore, is contributed by the government through annual Budget allotments.

The government has received `12,000 crore from banks, for which it has to pay interest of `1,200 crore this year. It has spent `15,000 crore on Mission Bhagiratha so far. This year, the government sanctioned `950 crore in the budget for Mission Bhagiratha, but this amount will not even cover the interest that is owed.

The government has managed to pay only `128 crore of the interest. Officials estimate that the burden will increase to `3,500 crore per year by the time the project is complete. Apart from this, an additional `1,000 crore will have to be spent on maintenance every year.

The interest burden is eating away the funds sanctioned by the government in its annual budget. The government had expected to receive returns through water supply made to industries — 10 per cent of the water has been reserved for industries. As per the official estimates, it has been difficult for the government to earn even `300 crore through industries.

The government wants to supply water at zero cost to 60 per cent of its rural consumers by 2018. The TRS intends to highlight this programme as one of its achievements.

Sources said that if the TRS wins in 2019, it will ask for feedback on the amount to be charged for safe drinking water through the project and then take a final call.