Govt Considers Rs. 10 Trillion Public Financing for Infrastructure Projects

INDORE, India - Sept. 12, 2017 - PRLog -- The NDA government is exploring a plan to raise Rs.10 trillion from retirees and provident fund beneficiaries, aiming to raise money in tranches of Rs. 10,000 crore by selling Ten-year bonds at a coupon of 7.25 to 7.75%, said Transport minister Nitin Gadkari. He further said that the govt was finding alternative mechanisms for funding huge infrastructure projects.

India plans to invest Rs. 3.96 trillion in the current fiscal year for its new integrated infrastructure programme, involving building of railways, roads waterways and airports.

State-run companies such as Power Finance Corporation and Rural Electrification Corporation have been selling tax exempted bonds to raise low-cost and long-term funds to help finance infrastructure projects.

The plan to raise fund from retirees and provident fund beneficiaries comes as Indian banks have turned averse to funding infrastructure projects. With many infrastructure companies weighed down by debt, the burden of creating infrastructure has fallen on the government. However, the government has been trying to raise resources to enhance its ambitious infrastructure programme through multiple ways.

In 2015, the government established the National Investment and Infrastructure Fund to raise funds for the infrastructure sector with an initial targeted amount of Rs. 40,000 crore, of which Rs. 20,000 crore was to be invested by the government. The remaining Rs. 20,000 crore was to be raised from long-term international investors, comprising sovereign wealth funds, insurance, pension funds and endowments.

The NDA govt is further working on raising capital by monetizing the operational road assets of National Highways Authority of India (NHAI) which has drawn up a list of 105 projects to be monetized over a period of time.

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