Assocham submits infrastructure growth roadmap to FinMin
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Assocham submits infrastructure growth roadmap to FinMin

Last Updated: Monday, November 12, 2012, 19:36
 
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Assocham submits infrastructure growth roadmap to FinMin
New Delhi: Domestic infrastructure companies should be allowed to list in overseas capital markets through direct equity shares in a bid to access low cost funds in order to spur growth, industry body Assocham has suggested to the government.

"Listed and unlisted domestic infrastructure companies be allowed to list in overseas capital markets through direct equity shares as companies once listed abroad have better access to low cost funds and simultaneously they may also be allowed to set up an entity abroad to raise equity and invest the same in India," it said in a letter to Finance Minister.

Also, the transfer of holding to such an overseas entity from an Indian entity should be permitted at erstwhile book value, prevalent till March 31, 2010 as infrastructure projects are long-term and require high gestation, it said.

Assocham president, Rajkumar Dhoot said, "Lack of availability of sufficient long term debt, dearth of equity funds, withdrawal of tax sops and absence of quick decision making are the key reasons responsible for a sluggish infrastructure growth in India."

Advocating the need for long-term bank finance availability for the sector, the industry body has suggested for mandatorily increasing the bank lending by way of incentives.

"Considering the priority status to the infra sector, a certain percentage of exposure should be made mandatory for all the banks just on the lines of export financing," it said.

"Besides, obligatory targets should also be imposed upon private sector banks and foreign banks operating in India as currently, major portion of infrastructure lending is contributed by public sector banks."

It suggested that banks may be permitted to issue long-term, tax free bonds for the purpose of lending to infrastructure sector at a lower rate of interest.

Provisions may also be made by the Reserve Bank of India (RBI) to provide interest subsidies to the banks for their exposure in this sector, it said.

Incentives doled out to the infrastructure entrepreneurs earlier, should be restored and current regulations be amended, it added.

PTI



First Published: Monday, November 12, 2012, 19:36


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