Interim Budget 2019: CII urges FinMin to help infra sector with loans

Long-term credit and tax-free infrastructure bonds needed, says CII

The government should help the infrastructure sector with long-term credit and tax-free infrastructure bonds, the Confederation of Indian Industries (CII) has suggested to the finance ministry weeks before the interim budget.

All commercial entities should be treated alike in competitive bidding and there should be a dedicated window for infrastructure within the overall ceiling for Foreign Portfolio Investors in corporate bonds, CII said in a paper.

Building integrated townships should be given infrastructure status to attract private investment. A pipeline of infrastructure projects should be set up at least for a decade.

The industry association also wanted renegotiation of more than 180,000 lakh cases pending with six tribunals dealing with telecom, electricity, consumer disputes, taxes and environmental matters bringing the economy to standstill.

“Given the long-term nature, they are fundamentally incomplete contracts. Incorporate a section on renegotiation in new as well as all ongoing contracts through a standard amendment based on discussion with stakeholders,” it suggested.

It added that there was need to develop Rs 50,000 crore credit guarantee and Low Interest Long Tenure Government Loan Scheme by leveraging government’s budgetary resources.

The industry body said that there was need to increase the spectrum of investors interested in infrastructure, particularly long-term capital and the same can be done creating a dedicated window for infrastructure within the overall ceiling for Foreign Portfolio Investors in corporate bonds.

As far as giving greater autonomy to the regulator is concerned, the industry body has suggested that they should be made more accountable and professionally managed institutions.

This has been suggested in the backdrop of recent toll exemptions in Maharashtra, Gujarat and Rajasthan that created stress on cash flows for several road operators.

In the Union Budget 2018-19, the central government allocated a sum of Rs 71,000 crore for highways.

The budget also allocated Rs 3,800 crore for Deendayal Upadhayaya Gram Jyoti Yojna (DUGJY) and Rs 4,900 crores for Integrated Power Development Scheme (IPDS) and Rs 16,000 crore for the Sahaj Bijli Har Ghar Yojana (Saubhagya) to enable last mile connectivity for rural households.