INDIA EXPLORES ₹10 L CR PUBLIC FINANCING FOR INFRA PROJECTS
With bank credit drying up for infrastructure projects, the government is exploring a scheme to raise ₹10 lakh crore from retirees and provident fund beneficiaries, transport minister Nitin Gadkari said.
The scheme aims to raise money in tranches of ₹10,000 crore, by selling 10-year bonds with an interest rate of 7.25-7.75%. Each tranche will be meant for a specific project, Gadkari added. “A lot of people fall prey to chit fund schemes. So our aim is to give such common people an investment opportunity.”
The government plans to invest ₹3.96 lakh crore in the current financial year to bankroll its new integrated infrastructure programme that involves the building of roads, railways, waterways and airports.
Gadkari who also holds the charge of the ministry of water resources, river development and Ganga rejuvenation, said the government was exploring alternative mechanisms for funding large infrastructure projects.
He declined to comment further stating the scheme was still in conceptual stages and was yet to be discussed with the finance ministry.
Power Finance Corp Ltd (PFC) and Rural Electrification Corp. Ltd (REC) have been selling taxfree bonds to raise low-cost and long-term funds to help finance India’s infrastructure plans.
India needs funds for its ambitious plans such as Sagarmala (ports) and Bharatmala (roads) to improve transport infrastructure. While the investment for the Bharatmala plan is estimated at ₹10 lakh crore —the largest ever outlay for a government road construction scheme -- the country has envisaged ₹8 lakh crore of investment until 2035 under the Sagarmala programme.