Sliding rupee value comes as a blessing for Telangana’s Musi project
The depreciation of the Indian rupee against the U.S. dollar has inadvertently increased the available funding for the Musi Riverfront Development project in Telangana. The project, supported by the Asian Development Bank, will now receive more local currency value from the original dollar-denominated loan.
Why it matters
Currency fluctuations can have significant, often unforeseen, impacts on the budgeting and execution of large-scale public infrastructure projects.
Falling rupee value has enhanced the project funding for the Musi Riverfront Development Corporation (MRDCL) to carry out the river development works.
The external funding from the Asian Development Bank has added bulk, due to the increased exchange value of dollar over the years. While in real terms, the multilateral agency has given approval for USD500 million, it had translated into ₹4,100 crore over a year ago when the loan was sought. With rupee value sliding substantially since then, the actual funding has now reached ₹4,500 crore. The dollar exchange rate has jumped from ₹82 to around ₹95 in the intervening period.
Government, on Thursday, issued orders according administrative sanction for ₹7,345.12 crore for Phase-1 of the Musi Riverfront Development project . This excludes the land acquisition cost.
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