The India Infrastructure Finance Company Ltd (IIFCL) will not avail of loans from the National Small Savings Fund (NSSF) as it believes that it can tap cheaper alternatives.
All this while, state governments had the right to use the entire funds collected by them under small savings schemes. From 1 April onwards, they will lift only 80% of collections, leaving the residue for the Union government. The current budget made IIFCL eligible to borrow from this corpus, projected to be around Rs6,000 crore.
IIFCL chairman and managing director, S.S. Kohli, said the current interest rates on NSSF loans were too expensive. “We definitely won’t borrow from NSSF at 9.5% or over,” he said.
Finance ministry officials said while the NSSF interest rates cannot go down, it might be possible for IIFCL to negotiate suitable terms for shorter maturities. Its main function is to raise resources from the market to lend directly to public-private partnership projects in all infrastructure areas except telecom.