Nabard eyes selling 'maximum' tax-free bonds in current fiscal

Lender looks to sell Rs 5,000-crore worth tax-free bonds

The National Bank for Agriculture and Rural Development (Nabard) looks to sell almost all of the Rs 5,000-crore tax-free bonds in the current fiscal. The bonds, which the National Highways Authority of India (NHAI) has surrendered, are set to be allocated to the lender. 

The highways authority had been allotted tax-free bond quota of Rs 24,000 crore for the current fiscal. The formalities for allocation are said to be under progress. 

“We are waiting for the final notification from Central Board of Direct Taxes and once we get, the process for selling the bonds will be initiated,” NABARD Chairman Harsh Kumar Bhanwala said. Since not much time is left for the closure of the current fiscal, efforts would be made to sell maximum bonds in the remaining period of the financial year 2015-16, he added.

Bhanwala added that the bank could even try to issue the entire lot of bonds that it would be allocated as it would be requiring long term fund for projects. 

According to the lender’s officials it would require close to Rs 80,000 crore to complete irrigation projects that have already been conceived and wanted the government to consider allowing it to raise resources via tax-free bonds so that the projects could be completed.

The Nabard had included the project related to setting up solar power plants up to 10-Mw under the Rural Infrastructure Development Fund (RIDF). The Chairman said it had not set any target as to how much capacity should be added as the state government concerned would be taking up the project that NABARD would fund. Bhanwala said area-based scheme would be introduced for dairy farming.