Road transport and highways minister Kamal Nath?s plan to issue bonds in different currencies will need a long hard look from the finance ministry, said government officials as this would impact the fisc. Nath said on Friday the bonds would enable non-resident Indians to invest in road projects in India. Speaking at the Pravasi Bhartiya Divas he sought co-operation from the finance ministry for the same even as the finance minister Pranab Mukherjee refused to make any commitment on behalf of his ministry.
?I would request the finance minister (Pranab Mukherjee) to look at issuance of infrastructure bonds in different currencies and denominations specifically for people of Indian origin and NRIs,? Nath said. He stressed that India is not only a stable but also an attractive investment destination as it grew at a time when most economies of the world were contracting. The bond issue would create a shelf of sequestered funds for the road ministry at a time, when the government has identified the country needs $500 billion to finance its infrastructure gap.
However, finance minister Pranab Mukherjee did not commit himself to this proposal of floating infrastructure bonds, as this requires detailed examination and Parliamentary nod. ?That does not mean that I am agreeing to that proposal, don?t take it as a commitment.? Last year Nath had floated a proposal for a dedicated finance raising arm for his ministry, as a special purpose vehicle, but it was shot down by the finance ministry.
But this time Nath has got support from the minister for overseas Indian affairs, Vayalar Ravi. He too said his ministry would move a proposal to the finance ministry to allow NRIs to invest in infrastructure bonds. ?This will give an opportunity to lakhs of overseas Indians to participate in India?s growth process,? he said. He said the idea mooted by Kamal Nath needed to be taken forward as it has been a long-standing demand of the overseas Indian community.
Kamal Nath said that in order to achieve a target of building 7,000 km of roads every year an investment of $50 billion is required. The ministry is therefore tapping different resources including multi-lateral funding, public private participation and foreign investments to provide the support for the projects. Explaining the rationale for the bonds, Nath said he needed to show work on at least 20,000 km.