Govt allows lenders to raise Rs 60Kcr via tax-free bonds

To encourage investment in the infrastructure sector, financial institutions have been allowed to raise about Rs 60,000 crore from tax-free bonds in 2012-13.

"For the year 2011-12, tax-free bonds for Rs 30,000 crore were announced for financing infrastructure projects. I propose to double it to raise Rs 60,000 crore in 2012-13," Finance Minister Pranab Mukherjee said, while presenting the Union Budget 2012-13 in Parliament.

"This includes Rs 10,000 crore for NHAI, Rs 10,000 crore for IRFC, Rs 10,000 crore for IIFCL, Rs 5,000 crore for HUDCO, Rs 5,000 crore for National Housing Bank, Rs 5,000 crore for SIDBI, Rs 5,000 crore for ports and Rs 10,000 crore for power sector," he added.

Strengthening the investment environment, Finance Minister also said, "the domestic investment environment has suffered on multiple counts in the past year. It is time to fast track policy decisions and ensure on-time implementation of major projects."

Focusing on domestic demand-driven growth recovery, he said, "we need to emphasize on infrastructure and industrial development of the country."

"Lack of adequate infrastructure is a major constraint on our growth. The strategy we have followed so far is to increase investment in infrastructure through a combination of public investment and public private partnerships (PPP)," he added.

Mukherjee further said that during the 12th five Year Plan, infrastructure investment will go up to Rs 50 lakh crore with half of this expected from private sector.

In line with investments in the infrastructure sector, the Finance Minister will ease the burden on rupee debt of the existing power projects in the country.

"I propose to allow external commercial borrowings (ECB) to part finance rupee debt of existing power projects," he said.

Source: Financial Express