As it is seen that bank credit is drying up for large infrastructure projects, the government is exploring a plan to raise Rs 10 trillion from retirees and provident fund beneficiaries, said transport minister Nitin Gadkari, as per news records. The plan aims to raise money in tranches of Rs 10,000 crore by selling 10-year bonds at a coupon of 7.25-7.75%. India plans to invest as much as Rs3.96 trillion in the current financial year to bankroll its new integrated infrastructure programme which involves building of roads, railways, waterways and airports.
India needs funds for its ambitious plans such as Sagarmala (ports) and Bharatmala (roads) to improve its transport infrastructure. While the total investment for the Bharatmala plan is estimated at Rs10 trillion—the largest ever outlay for a government road construction scheme—the country has envisaged Rs 8 trillion of investment until 2035 under the Sagarmala programme. The total road length to be developed as expressways under Bharatmala will be around 51,000km; the Sagarmala programme envisages construction of new ports to harness the country’s 7,517km coastline and setting up as many as 142 cargo terminals at major ports, as per records.
The plan to raise money from retirees and provident fund beneficiaries comes as Indian banks, loaded with bad debt, have turned averse to funding infrastructure projects. With many large conglomerates and infrastructure companies weighed down by debt, the onus of creating infrastructure has fallen on the government. The government has been trying to raise resources to boost its ambitious infrastructure programme through multiple ways.