Feb 28, 2013, 06.42 PM IST
Infrastructure companies reeling under huge debts have a reason to cheer after the Finance Minister assured them availability of low cost funds in the Union Budget 2013-14.
Infrastructure companies reeling under huge debts have a reason to cheer post the Finance Minister assuring them availability of low cost funds in the Union Budget 2013-14.
The aggregate debt of top ten infra companies accounts for about 13 per cent of total bank loans and a whopping 98 per cent of the entire banking system net worth, Credit Suisse had stated in August last year.
There may not be any major changes in their position even today, say experts.
Companies like GMR , GVK and Lanco InfraTech have been crying hoarse about high interest outgo on huge debts. In an interview with moneycontrol.com, a few months ago, A Subba Rao, chief financial officer at GMR had said that all infra companies are in huge debts because projects which they undertake are long drawn and companies break-even only after a year or two of operations.
Meanwhile, Finance Minister P Chidambaram has announced 3000 kms of road projects in 2013-14 in various states including Gujarat, Maharashtra, Rajasthan and Andhra Pradesh.
He also said committees will be set up to fast- track new projects and even those that were stalled due to technical reasons. He also said finance will be available at lower cost which will lease interest burden for the infra sector. For the purpose, infra debt funds will be encouraged.
He further said a regulatory body will be set up to clear pending disputes related to land acquisitions and environmental hurdles. The regulator will also address various issues faced by developer and also review NHAI (National Highways Authority of India) performance and policies.
"While every sector can absorb new investment, it is the infrastructure
The Plan envisages that the private sector will share 47 percent of the investment. Besides, we need new and innovative instruments to mobilise funds for this order of investment, he said.
Companies like IRB Infra, Ashoka Buildcon, GMR and GVK will benefit as they will now have access to low cost funds.
Tags: Budget 2013, Union Budget 2013 - 14, Ministry of Finance, India Budget 2013, Indian Budget 2013, Budget 2013 India, Live Budget, Live Budget Updates, Budget Highlights, 2013 Budget, Budget 2013-14, Finance Budget, Budget 2013 Highlights, Budget 2013 Speech, Budget 2013 Tax Reduction, Budget 2013 Tax Changes, Indian Budget Deficit, Direct Tax Code 2013
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