The Pune Municipal Corporation has approved a plan to raise a ₹450 crore loan from Cosmos Cooperative Bank for land acquisition linked to the High Capacity Mass Transit Route and the inner ring road, as delayed state transfers and other outstanding municipal revenues put pressure on its project finances.
Under the arrangement approved by the civic body’s standing committee, the municipal corporation will place deposits worth ₹500 crore with Cosmos Cooperative Bank and obtain a loan of ₹450 crore against them. The borrowing is intended specifically to fund land acquisition for the two major transport infrastructure projects.
The decision comes as the civic body awaits a much larger payment from the Maharashtra government. Pune Municipal Corporation is expected to receive around ₹1,200 crore from the one per cent surcharge collected on property registrations within its jurisdiction. The state government recently approved ₹109.54 crore for Pune as part of a wider distribution of ₹421 crore in stamp-duty surcharge funds to municipal corporations across Maharashtra.
Even after the latest allocation, approximately ₹1,100 crore of the amount due to Pune Municipal Corporation is expected to remain outstanding, according to the report. The surcharge is linked to property-registration activity, which has expanded alongside Pune’s rapid growth and high volume of real-estate transactions. The civic body has reportedly been a significant contributor to the state’s stamp-duty revenue among Maharashtra’s municipal corporations, excluding Brihanmumbai.
The delayed release of this revenue has affected the corporation’s ability to deploy funds for large infrastructure works. Instead of receiving the surcharge amount on a timely basis, municipal corporations have been receiving payments in instalments, creating a gap between revenue generated within the city and funds available for local capital projects.
Pune Municipal Corporation is also facing pressure on its property-tax collections. The Maharashtra government imposed a stay on the collection of property tax from villages that were merged into the municipal limits two years ago. With no final decision reported on the matter, arrears from these areas have risen to more than ₹2,000 crore.
Additional arrears are also pending from cantonment boards and government offices in respect of property tax and water charges. The report places these dues at several crore rupees, adding to the corporation’s revenue constraints while major land-intensive projects remain to be financed.
The High Capacity Mass Transit Route and the inner ring road both require land acquisition before construction can progress across their planned alignments. The standing committee’s approval of the borrowing proposal provides the municipal corporation with a financing route while it continues to await state transfers and a resolution on tax collection from the merged villages.
The immediate next step is the execution of the deposit-and-loan arrangement with Cosmos Cooperative Bank and the use of the funds for land acquisition for the two projects. The report does not specify the repayment period, interest rate or revised completion timeline for either infrastructure project.
