On Wednesday, Minister for Road Transport & Highways, Nitin Gadkari, told the media that infrastructure projects in the country require low-cost financing, and surplus reserves of RBI can be used for the same.
Addressing a virtual CII event, Gadkari told the media that the National Highways Authority of India (NHAI) must also have a financial arm like the Power Finance Corporation (PFC).
Gadkari said that the country has a surplus of dollar reserves. He will discuss with the RBI governor about how to formulate a policy using which they can use the foreign exchange reserves for infrastructure development in the nation.
Recently, a Parliamentary panel has also recommended that the RBI may consider the possibility of using surplus reserves to fund long-term road infrastructure projects.
RBI might also look into the feasibility of using surplus reserves for creating sovereign wealth reserve to fund long-term infrastructure assets.
Gadkari told the media that they require some financial organisations, those who can decrease interest cost for infrastructure, adding that the Indian Railways has the Indian Railway Finance Corporation (IRFC), the Power Ministry has Power Finance Corporation but NHAI does not have any financial arm.
They need one organisation, where NHAI stakes and financial institution stakes are there. With a joint venture, they can formulate the policy, Gadkari suggested.
Additionally, the minister suggested that in place of a 2% bank performance guarantee, the entire project can be guaranteed.
Gadkari told the media that the road ministry aims to raise Rs 1 lakh crore through the monetisation of highway projects.
Also read: Nagpur gets Rs 1,824 cr from Central Road Funds for various roads
