Rec Eyes Rs 2500 Crore Mop-Up This Fiscal

The Rural Electrification Corporation (REC) is expected to mobilise Rs 2,500 crore from the domestic market during the current fiscal.

Divakar Dev, chairman and managing director, said the corporation has no plans to tap the international market for the time being as the required funds are available internally.

The corporation had introduced its first capital gains exemption bonds recently. Dev said the loan disbursement this year will help in raising Rs 5,000 crore.

The five-year term bond is expected to fetch an 8.5 per cent interest on an annualised basis, which according to him, may change as the interest rate structure changes.

REC had registered a profit of Rs 337 crore during 2000-01, which is 6.98 per cent higher than the profit during 1999-00. A total loan of Rs 6,308 crore was sanctioned during the last fiscal. During 1999-00, sanctions was at Rs 4678 crore, he said. The total fund mobilisation stood at Rs 1611 crore.

Dev said the corporation is also planning to introduce a few more attractive schemes which will also fetch tax benefits as the corporation had been granted eligibility to raise capital gain exemption bonds under section 54 EC of the Income Tax Act in the finance bill 2001-02.

The fund mobilisation during 1995-96 was to the tune of Rs 113 crore only. The total disbursement of loans of the corporation during the last three decades was around Rs 21,000 crore.

He said the disbursement of loans to states such as Madhya Pradesh, West Bengal, Bihar and Assam had been stopped due to re-payment problems.

REC is ready to disburse any amount as per the requirement of various state electricity boards. The corporation, which has AAA rating of Crisil, has achieved commendable results as the recoveries increased from Rs 2716 crore in 1999-00 to Rs 3582 crore during the last fiscal.