Once a for-profit body, the finances of the Greater Mohali Area Development Authority (GMADA) have slipped into the red, with profits ranging from ₹68 crore in March 2021 at ₹38 crores in March 2022.
The value of GMADA’s assets also fell by approximately 11% — from ₹5,660 crore to ₹5,000 crores during this period.
What adds to the distress is the fact that the Authority pays ₹270 crores per annum in interest on loans taken from various public and private banks. According to the records, GMADA took out loans in the amount of ₹3,750 crores in the last decade for land acquisition.
A senior GMADA official said, “While we have taken out loans, we have also created assets over all these years. The loan was contracted to acquire land for Aerocity, Eco-city in New Chandigarh, IT city and infrastructure development. In addition, the loans were contracted at a minimum interest rate of 6.5% to 6.75%.
GMADA had even mortgaged several of its properties, including large chunks of land, to benefit from large amounts of loans and overdrafts. With its own empty coffers, the development authority had even resorted to new loans to repay the previous ones.
Records also show that the Authority is struggling to pay the hefty monthly installments, which run into the hundreds of thousands of dollars.
GMADA Chief Administrator Amandeep Bansal said, “We have plans to auction properties, complete pending projects to cash in investments and reduce future expenses to shore up the financial position. Our fund was deposited in a fund enhancement account.
Over the past two years, GMADA has earned approximately ₹1,000 crore after auction of large properties.