Weekly Current Affairs

Gadkari plans financing arm for road, shipping sectors [Infrastructure]

  • Union minister for roads, transport and shipping Nitin Gadkari says he wants to set up a financing corporation for the two sectors and push the bureaucracy to take quick decisions to make banks plough more money into projects.
  • It will give a sense of security to banks to deal with projects from these sectors.
  • The proposed corporation will be in addition to the role of the National Highways Authority of India, which, too, raises finances for the road sector.
  • It is argued that with banks already keen to finance road projects, it made no sense to create a similar organisation like the Power Finance Corporation for the power sector, as the costs of raising the money would be higher.
  • But Reserve Bank of India data shows zero growth in funding for the road sector from the banking sector till May 2016.
  • The proposed financing company would be able to tap into both domestic and foreign funds for the sector.
  • Land acquisition for road projects would follow the models that Andhra Pradesh and Gujarat had adopted i.e. government would acquire the land and return about 40 per cent to the owners after developing it.
  • The roads, transport and shipping ministry plans to set up a logistics park beyond Delhi’s municipal limits along the eastern and western peripheral expressways. These are innovative models that can raise money and de-congest Delhi to reduce its pollution footprint.