Budget 2015: Government to raise funds via infra bonds for railways, roads

NEW DELHI: The government has proposed to raise funds for railways, roads and irrigation sectors by issuing tax-free infrastructure bonds.

Finance Minister Arun Jaitley in his maiden full-year budget presentation said: "I intend to permit tax-free infrastructure bonds for the projects in the rail, road and irrigation sectors."

Jaitley also said the government will establish a National Investment and Infrastructure Fund (NIIF) and ensure an annual flow of Rs 20,000 crore to it.

"This will enable ... raise debt, and in turn, invest as equity, in infrastructure finance companies, such as the IRFC (Indian Railway Finance Corporation) and NHB (National Horticulture Board)," he said.

The government also proposed to revisit the PPP (public private partnership) model.

Jaitley in his Budget speech announced investments to the tune of Rs 70,000 crore in the infrastructure space.

The Budget increased outlays on both the roads and the gross budgetary support to the Railways, by Rs 14,031 crore and Rs 10,050 crore, respectively.