Union minister Nitin Gadkari today expressed his inhibitions about the dependence on foreign funds and said he is keen to pool public funds to build large infrastructure projects. He favoured taking deposits from retired personnel, the poor, teachers and constables to fund these projects, and returning their money with good interest rate.
“I think we do not want investments from foreigners. We’ll take deposits from the retired, the poor, teachers, and constables and return it to them,” Gadkari said this evening. He was addressing the centenary celebrations of the largest cooperative lender Saraswat Cooperative Bank here.
The Minister for Road Transport said that the government is keen to build projects in the EPC (engineering, procurement and construction) mode. Since the late 1990s, PPP mode (public private partnerships), wherein a private entity builds a project on behalf of the government, has come to define the infra landscape in the country.
Gadkari said the commoners’ money will be returned and the interest paid will be more than that offered by banks, which will serve as a security. “We will give them more interest than banks so that they get the security,” the minister said.
He listed out the construction of 55 flyovers, the Bandra-Worli Sealink and the Mumbai-Pune Expressway during his stint as PWD minister in the Shiv Sena-BJP government in Maharashtra (1995-99) as a precedent of commoners’ money getting channelled for building mega projects.
Without specifying how the government is financing it, he said that his ministry has decided to build the Rs 44,000-crore Mumbai-Vadodara Expressway in the EPC mode, and the work should be start soon.
“It is a secured sector, you get money from the toll. I told nationalised banks that I don’t have any limitation of funds and can work in EPC mode.” Gadkari said there is tremendous appetite for investing in infra projects backed by the government and said market experts have told him about the ability to arrange up to Rs 5 trillion in eight days.
He cited the recent success of the Cochin Shipyard IPO, which was oversubscribed 76 times and got proposals of up to Rs 1.25 trillion, to illustrate his point.
Gadkari urged the Reserve Bank not to merge co-operative banks with private lenders, underpinning the need to maintain their character. “Please do not convert the cooperative banking movement into private banks by merging them. If there are some mistakes, make qualitative changes and make them more powerful.”
Addressing the gathering, Maharashtra Chief Minister Devendra Fadnavis endorsed Gadkari’s view of raising own funds rather than relying heavily on foreign funds. “For that we need clean projects, transparency and it has to be dynamic,” he said.
Fadnavis touched upon the RBI’s role as a regulator in borrowing and controlling interest rates saying, “The RBI also needs to review its practice of keeping high cost borrowings. Borrowing costs are going down across the world. You cannot always be conservative. Regulatory body has to be bold enough to grow.
“Just lower the borrowing cost by 1 per cent and Maharashtra alone can borrow up to Rs 1 trillion for infra projects with assured returns on investment,” the chief minister said.