To augment infrastructure investment, the Cabinet on Wednesday approved a proposal to allow six PSUs including NHAI, PFC and REC to raise R31,300 crore through bonds in FY17.
“Out of the Extra Budgetary Resources (EBR) of R31,300 crore, it is proposed to finance the funds to be raised by PFC, Indian Renewable Energy Development Agency (IREDA), Inland Waterways Authority of India (IWAI) and NABARD by the Government of India,” said an official statement.
This implies that the principal and the interest in respect of the EBR of R16,300 crore to be raised by PFC, IREDA, IWAI, and NABARD will be financed by the Centre by making suitable budget provisions, it added. The move is intended to supplement the efforts of the government to improve infrastructure spending and to improve the revenue-capital mix of the expenditure for a more sustainable growth. The government had made an announcement in the latest Budget in this regard.
Separately, the Cabinet also approved conversion of Centre’s loan into equity and waiver of interest in respect of Richardson & Cruddas Ltd, a sick PSU. The move will enable the company to come out of purview of Board for Industrial and Financial Reconstruction. For this purpose the Cabinet approved the conversion into equity of the government loan of R101.78 crores given to the company, alongwith the interest amounting to Rs 424.81 crore accrued on this loan. The Cabinet also gave in principle approval to the strategic disinvestment of Nagpur and Chennai units of the company and shifting of operations from Mumbai land to other locations of company. However the Company’s land at Mumbai will be converted from lease hold to “Occupation Class II” so as to enable the company to identify the best use of this piece of land for optimal utilization as per Government guidelines.