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Just a day after the Telangana government announced plans to take over Hyderabad Metro operations from L&T Metro to speed up expansion, it is now facing a significant financial hurdle. The takeover deal is estimated at ₹15,000 crore/ ₹13,000 crore to clear L&T's debt and ₹2,000 crore to buy back
its equity. However, central government rules say that any borrowing done by the state or by state-backed agencies will be counted under the Fiscal Responsibility and Budget Management (FRBM) limits. Only if the state stays within this borrowing cap can it obtain approval from the Centre for Metro Phase 2A and 2B, which need to be smoothly connected to Phase 1.
Requirement of Metro Loan
The problem is that halfway through the 2025-26 financial year, Telangana has room to borrow only ₹8,000 crore more, far below the ₹15,000 crore needed. As a result, Chief Minister Revanth Reddy is expected to meet Union Finance Minister Nirmala Sitharaman in Delhi to request an exemption from FRBM limits. He may also write to Prime Minister Narendra Modi asking that the Metro loan be excluded from the state's borrowing calculations. The state had originally planned to borrow ₹64,539 crore for 2025-26, but the Centre allowed only ₹54,009 crore. Out of this, Telangana has already borrowed ₹45,900 crore in the first six months, leaving just ₹8,109 crore for the rest of the year. Officials stated routine expenses for welfare schemes will be difficult to meet, let alone taking on extra debt.
Moreover, previous requests for borrowing relaxation, including a proposal to raise ₹30,000 crore for education projects, have not been approved. For now, the government is depending on selling Raidurg lands and advance revenue from liquor shop licences, but if the Centre relaxes the rules, the Metro takeover and expansion plans may get stuck.
