New Delhi: To guard against a potential fund crunch for infrastructure projects, the government may allow ongoing projects to tap into the Rs10,000 crore refinance window opened by India Infrastructure Finance Co. Ltd (IIFCL), Planning Commission deputy chairman Montek Singh Ahluwalia said on Monday.
He was addressing his first press conference after the Planning Commission was reconstituted on Friday.
Core concerns: Plan panel deputy chairman Montek Singh Ahluwalia. PTI
When the refinance window was approved in the Union government’s stimulus package earlier this year, only new projects were eligible to apply. IIFCL officials had said later that the refinance window had not taken off because of a lack of new projects.
The government-owned company, which is mandated with funding infrastructure projects, raised Rs10,000 crore in tax-free bonds in two tranches in January and March, with which it proposes to refinance bank lending for infrastructure projects.
“Refinance by its very nature would help the industry. Volumes (of projects) has not been so much but given the current risk scenario, it would be helpful,” said Ankineedu Maganti, a director with Hyderabad-based infrastructure developer Soma Enterprise Ltd.
Government officials, who did not want want to be identified as they are not authorized to speak to the media, said they had not yet received any formal communication on this.
Ahluwalia said public-private partnership should form a significant part of infrastructure financing in India, taking cue from President Pratibha Patil’s address to Parliament on 4 June.
Patil, in her address, had said the government would focus on sectors that were adversely affected, including infrastructure. “This must be accompanied by measures to achieve a countercyclical expansion in public investment in infrastructure sectors including public-private partnership in these sectors,” Patil had said.
Ahluwalia also stressed on the need to consolidate flagship programmes, expand the scope of the National Rural Employment Guarantee Act, or NREGA, expand Bharat Nirman, a rural infrastructure project, into its second phase, and issue unique identity cards for each citizen in three years.
He said the unique identity cards can be linked to smart cards made for the poor to access the public distribution system, through which essential items are provided at subsidized rates.