The National Highways Authority of India (NHAI) has launched tax-free bonds to raise up to Rs 4,000 crore in the current fiscal to fund its road projects. "The NHAI plans to raise at least Rs 3,000 crore through the tax-free bonds in 2009-10 to fund various highways projects.
It had raised Rs 1,700 crore in the previous fiscal (2008-09) to strengthen the sector," NHAI Member (Finance) A Didar Singh told PTI. The government has allowed National Highways Authority of India (NHAI) to raise up to Rs 4,000 crore through tax-free bonds in the current fiscal. The three-year bonds, priced at Rs 10,000 each, carries a coupon rate of 6.25 per cent per annum and will qualify for income tax exemption under section 54 EC of the Income-Tax Act, 1961. The subscription for bonds, which opened on May 11, would be closed on March 31, 2010. The minimum application size for the non-transferable bonds has been fixed at five bonds (Rs 50,000) and maximum at five hundred (Rs 50 lakhs). The bonds are non-negotiable and can not be pledged as a security to seek any loan. Singh further said negotiations were also in advanced stage with the Asian Development Bank (ADB) for procuring 400 million dollar loan for the road sector.