Pune: PMC's Decision To Take ₹300 Crore Loan Despite ₹3,000 Crore In Fixed Deposits Raises Questions

The Pune Municipal Corporation (PMC) has announced plans to take a loan worth ₹300 crore as part of its budget for 2025-26, presented on Tuesday by Municipal Commissioner Rajendra Bhosale. However, this decision is raising a lot of questions. Civic activist Vivek Velankar filed a Right to Information (RTI) to seek information regarding the funds.

"According to data provided by PMC, just two days ago, PMC's fixed deposits worth ₹2,400 crore in various banks will mature by July 2025. Additionally, another ₹700 crore in fixed deposits will mature by December 2025 and bonds worth ₹190 crore will mature by September 2025. Given these returns, why is PMC opting for a high-interest loan instead of utilising its existing funds?" asked Velankar.

“This is an irrational financial decision. The civic body is keeping large sums in fixed deposits at lower interest rates while simultaneously borrowing money at higher interest rates. This is nothing short of a reckless financial strategy," added Velankar.

The move has sparked concerns over the PMC’s financial planning, with activists and experts questioning the rationale behind increasing debt when substantial funds are already available.

Mukund Vithal Bakre, an advocate who deals with taxation, said, "If the funds are not earmarked or kept for a specific proposal, then PMC should use available funds instead of taking loans and paying high interest rates. This is very obvious. Why would you bear a brunt of heavy interest if you already have money in your pocket?"

The Free Press Journal tried contacting Madhav Jagtap, head of tax department at PMC, but couldn't get a response.