Union Road Transport and Highways Minister Nitin Gadkari on Wednesday proposed a policy of using the Reserve Bank’s growing foreign exchange reserves to finance road projects, saying the country needs low-cost financing for such infrastructure projects.
Addressing the annual session of the industrial body CII, Gadkari said the National Highway Authority (NHAI) should also have a finance division like Power Finance Corporation (PFC) of the Ministry of Power. He said, “We have an extra dollar in the country. I have decided to speak with the Governor of the Reserve Bank on how we can make a policy on how we can use these foreign exchange reserves for the development of our infrastructure.”
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According to the latest Reserve Bank data, the country’s foreign exchange reserves increased by $ 9.427 billion for the week ended July 30, to a record high of $ 620.576 billion. Recently, the Parliamentary Committee has noted that India’s foreign exchange reserves have increased substantially in recent times and, considering the availability of adequate foreign reserves with the Reserve Bank of India, long-term road infrastructure may consider the possibility of using additional funds to finance projects.
Gadkari said he was talking to the World Bank, the Asian Development Bank and the New Development Bank (NDB) for infrastructure financing in India, but was not satisfied with his response. “That’s why we need some financial institutions that can reduce interest costs for the infrastructure sector,” he said.
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Giving examples, the Union Minister said that the Indian Railways had got the Power Finance Corporation of the Indian Railway Finance Corporation (IRFC) and the Ministry of Power but the NHAI had no financial side. Gadkari suggested, “We need an NHAI partnership and a financial institution partnership. We can take policy from such a joint venture.
