If it gets a nod from the court to auction, there is fear of public backlash and opposition. If not, welfare schemes and development projects may suffer

■   The Telangana government raised Rs 10,000 crore via bonds using 400-acre Kancha Gachibowli land as collateral.

■   The Supreme Court is hearing the case amid protests from environmentalists and the HCU community opposing tree felling.

■   Auction expected to fetch Rs 40,000–Rs 50,000 crore, now uncertain due to legal and political hurdles.

■   Opposition BRS threatens to reclaim land if it wins the 2028 elections, deterring investors.

■   If the auction fails, the state may face tough choices: raise taxes, cut welfare schemes, or restructure debt.

MAHESH AVADHUTHA  I hyderabad

The Telangana Government finds itself between the devil and the deep blue sea over the Kancha Gachibowli land issue. If the Supreme Court rules against the government’s plans, the most obvious path to loan repayment—auctioning the land—would be legally untenable.

In that case, the government might have to increase state taxes to generate alternate revenue, an unpopular move that could trigger public backlash. Another option would be to cut back on welfare schemes or development projects, potentially affecting lakhs of beneficiaries. Alternatively, it may have to seek additional loans or financial restructuring, further deepening the state’s debt burden.

Or in the case of the government managing to convince the court that the land is non-forest and gets a green light, another hurdle looms large—public resistance and political threats. Either way, the government finds itself in a CATCH-22 situation.

Even if the government gets a nod from the court for an auction, the opposition BRS party has already warned potential investors, promising to reclaim the land post-2028 elections and convert it into a massive eco-park. This uncertainty could scare off bidders.

The Telangana government is grappling with mounting public opposition, legal hurdles, and a high-stakes financial gamble over the contentious Kancha Gachibowli land. At the heart of the crisis is a whopping Rs.10,000 crore loan raised through bonds at an interest rate of 9.35%, with this premium land parcel pledged as collateral. But as the auction plans get entangled in legal and environmental roadblocks, the state's repayment strategy is hanging by a thread.

The Telangana State Industrial Infrastructure Corporation (TGIIC) had showcased the 400-acre Kancha Gachibowli land—located in one of Hyderabad’s most sought-after real estate zones, as a golden goose. The government hoped to rake in a staggering Rs 40,000 to Rs.50,000 crore through public auction, which would not only wipe out the loan but also potentially fund several state schemes. 

However, things haven’t gone as planned.

Inside sources reveal that a significant portion of the loan was already funnelled into welfare schemes such as Rythu Bharosa soon after Sankranti, though the exact amount spent remains undisclosed. If the apex court ultimately bars the government from auctioning the land, the state could be left with limited, and politically risky, options to repay the debt.

In either scenario—whether due to legal blockage or lack of investor interest—the possibility of a failed auction is very real. This throws the entire loan repayment plan into question, and the government would have to explore alternative ways to meet both interest and principal payments on the Rs.10,000 crore debt. At stake is not just financial credibility, but also public trust.

Will the burden fall on citizens through increased taxes? Or will crucial development and welfare initiatives be scaled back? As Telangana treads this tightrope, all eyes are on the Court's ruling—and the government’s next move in this high-stakes land-and-loan saga.