Govt fixes Rs. 50,000cr infra fund from LIC

    LIC Infrastructure Fund
    In order to ensure sufficient flow of funds for road sector, the road transport and highways ministry decided to tap funds to the tune of Rs. 50,000-cr from Life Insurance Corporation of India to undertake its ambitious expressways development program, said official sources, adding that road transport minister has already given nod for the plan and the proposal is being taken up with LIC and finance ministry as the funds in question be given in tranches and the interest rate to be kept around G-secs. As per Union Budget proposals, government plans to award road construction contracts for a little over 10,000 km of highway next fiscal and also 50,000 km of state highways would be upgraded to national highways, which would entail a significant investment. In an encouraging development finance minister has already allocated Rs 55,000-cr as budgetary grant to the road ministry and allowed National Highways Authority of India (NHAI) to raise tax free bonds worth Rs 15,000cr. The road ministry had sought around Rs 85,000-cr from the finance minister and that with the budgetary allocation, the road ministry would be able to construct only 7,000 kilometres of highways and the rest of the expansion would have to be undertaken through extra budgetary support like loan from LIC and public-private partnerships, the sources added.
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