Maharashtra Government Approves Massive ₹13,000 Crore Guarantees for Nagpur Development
In a significant move to accelerate infrastructure development, the Maharashtra government on Monday cleared state guarantees totaling almost ₹13,000 crore for two major projects in Nagpur. The approvals cover the New Nagpur Business District, anchored by the International Business and Finance Centre (IBFC), and the proposed New Outer Ring Road with four truck-and-bus terminals. Both initiatives are set to transform Nagpur into a key economic hub, with funding secured through loans from the central government's Housing and Urban Development Corporation (HUDCO).
Financial Details and Revised Guarantees
The finance department issued separate Government Resolutions (GRs) to formalize the guarantees. For the IBFC project, the government sanctioned a guarantee of ₹4,999.28 crore, covering a principal loan of ₹3,000 crore and projected interest of ₹1,999.28 crore. Similarly, for the New Outer Ring Road and terminal project, the guarantee stands at ₹7,999.13 crore, covering a principal of ₹4,800 crore and projected interest of ₹3,199.13 crore.
These guarantees are revised versions of earlier approvals, superseding previous GRs. The IBFC guarantee replaces one dated November 12, 2025, which only covered the ₹3,000 crore principal. Likewise, the Outer Ring Road guarantee replaces a GR from October 9, 2025, which was limited to the ₹4,800 crore principal. The Nagpur Metropolitan Region Development Authority (NMRDA) will borrow the loans from HUDCO at a quarterly interest rate of 8.60%, repayable in 60 equal instalments over 15 years. NMRDA has a 12-month window starting from April 20 to draw down the funds.
New Nagpur Business District: A Transformative Project
The IBFC project is part of the larger ₹11,300 crore New Nagpur Business District, which is being developed over 692.06 hectares in Mouza Ladgaon and Mouza Godhani in Hingna. NMRDA will implement the project with NBCC (India) Ltd serving as the consultant. The loan will specifically fund the land acquisition phase, while approximately ₹3,500 crore has been allocated for Phase I development.
Land acquisition efforts are well underway, with surveys completed for 269 survey numbers in Ladgaon and 98 in Godhani, covering 456.41 hectares in Ladgaon and 173.02 hectares in Godhani. A committee is currently finalizing compensation rates, after which notices will be issued to farmers. The government has offered compensation at five times the prevailing land rate, and Revenue Minister and Nagpur Guardian Minister Chandrashekhar Bawankule has assured that farmers will also receive a developed plot of 1,500 square feet per acre of land acquired within the project area. The total acquisition cost is now expected to exceed ₹4,000 crore, nearly ₹1,000 crore above the original estimate.
This ambitious business district is designed to position Nagpur as a premier business and finance hub, with projections indicating it will generate over 5 lakh jobs, particularly in knowledge-based industries and startups.
New Outer Ring Road: Enhancing Connectivity
The New Outer Ring Road will encircle Nagpur and include truck-and-bus terminals at strategic locations: Turagonda and Shirul in Hingna, Parsad in Kamptee, and Itagaon in Parseoni. This infrastructure is aimed at easing freight and passenger movement, reducing congestion, and improving overall transportation efficiency in the region.
Governance and Repayment Mechanisms
The state's guarantee will only come into effect if NMRDA is unable to repay the loans. To ensure transparency and accountability, NMRDA must submit monthly repayment status reports to the Urban Development Department (UDD) and Finance Department, along with a half-yearly financial report every March 31 and September 30. Additionally, a guarantee fee of 0.50 per 100 will apply, payable every six months.
These projects represent a major investment in Nagpur's future, promising to drive economic growth, create employment opportunities, and enhance urban infrastructure. With the government's backing and structured financial plans, they are poised to make a lasting impact on the city's development landscape.
