The Union Cabinet has given its approval for the raising of a total of Rs 31,300 crore in 2016-17 and to service the principal and interest against extra budgetary resources (EBR) of Rs 16,300 crore by the Centre to augment infrastructure spending.
Out of the EBR of Rs 31,300 crore, it is proposed to finance the funds to be raised by Power Finance Corporation (PFC),
Indian Renewable Energy Development Agency (IREDA), Inland Waterways Authority of India (IWAI), and National Bank for Agriculture and Rural Development (NABARD) by the government.
This implies that the principal and the interest in respect of the EBR of Rs.16,300 crore to be raised by PFC, IREDA, IWAI, and NABARD shall be financed by the Centre by making suitable budget provisions in the demand of respective ministries/departments.
The move is intended to supplement the efforts of the government to improve infrastructure spending and to improve the revenue-capital mix of the expenditure for a more sustainable growth. Infrastructure spending is one of the key parameters to judge the sustainability of growth in a country. The proportion of Capital expenditure to the total expenditure is the yardstick to measure this, the government said on Wednesday.
The Budget 2016-17 had announced that in order to augment infrastructure spending further, the government will permit mobilisation of additional finances to the extent of Rs 31,300 crore by NHAI, PFC, REC, IREDA, NABARD and Inland Water Authority through raising of bonds during 2016-17.