Sun Feb 01 13:52:50 UTC 2026: ### Hyderabad Metro Phase II Funding Hinges on L&T Merger Resolution

The Story:

The Central government, as stated by Union Minister of Coal and Mines G. Kishan Reddy on February 1, 2026, will withhold funding for Phase II of the Hyderabad Metro Rail project until the Telangana government finalizes discussions and reaches a decision regarding the proposed merger of Phase I with L&T through the established committee. Mr. Reddy emphasized that the Telangana government needs to clarify its stance on Phase I and submit a complete Detailed Project Report (DPR) before financial assistance can be processed.

Despite this condition, Mr. Reddy highlighted that the Union Housing and Urban Development Ministry has allocated ₹28,740 crore for MRTS and Metro projects, ensuring sufficient funds for the Centre’s share of Hyderabad Metro Phase II, once the prerequisites are met. He also touted other benefits for Telangana in the Union Budget, including an increased share in Central taxes and proposed high-speed rail corridors originating from Hyderabad.

Key Points:

  • The Central government will decide on funding for Hyderabad Metro Rail Phase II after the Telangana government resolves the Phase I merger issue with L&T and submits a Detailed Project Report.
  • G. Kishan Reddy stated that the Union Housing and Urban Development Ministry has allocated ₹28,740 crore for MRTS and Metro projects, ensuring funds for the Centre’s share of Hyderabad Metro Phase II, contingent on the Telangana government meeting the requirements.
  • Telangana’s share in Central taxes has increased by 13.5% to ₹33,180 crore for 2026–27.
  • Three high-speed rail corridors are proposed to originate from Hyderabad, connecting to Pune, Bengaluru, and Chennai.
  • The Union Budget includes measures to support the Kakatiya Mega Textile Park, establish girls’ hostels in every district for STEM students, and provide incentives for municipal bonds.

Key Takeaways:

  • Funding for Hyderabad Metro Phase II is contingent on resolving existing issues related to Phase I, specifically the proposed merger with L&T.
  • The Central government is emphasizing the need for procedural compliance and a clear plan from the Telangana government.
  • Despite the conditional funding, the Union Budget includes various other initiatives aimed at benefiting Telangana’s infrastructure, economy, and education.

Impact Analysis:

The delay in releasing funds for Phase II of the Hyderabad Metro could potentially impact the project’s timeline and overall development of Hyderabad’s public transportation infrastructure. The resolution of the Phase I merger is crucial for the efficient allocation of resources and the smooth continuation of the metro rail expansion. Furthermore, the state and central governments need to coordinate for large infrastructure projects to be completed on time.

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