The government is planning to launch a special ‘infrastructure fund’ to help generate money for major projects it plans to take up in the state. The government has envisaged that it needs Rs 1 lakh crore to finance key infrastructure projects in the next five years. “Given the constraints in raising such huge amounts from available sources of funds in the traditional method, there is a need to look at alternative methods to generate funds for infrastructure development,” Finance Minister Sudhir Mungantiwar said in his budget speech.
Under the proposal, the state will set up an infrastructure fund to be managed by a Special Purpose Vehicle called Mahainfra. “The SPV is proposed to act as a single window for aggregating the land held by various departments for securitistion which are neither in use nor expected to be developed by the holding department for next 10 years,” Mungantiwar said.
Land will be escrowed to the SPV for generation of funds. By securitising these plots, the government will be able to raise money through low cost loans and bonds from large investors. Mungantiwar said that the state will recruit a team of experts to increase the efficiency of the body. “We are also exploring the possibility of converting the Mahainfra into a non-banking financial company in line with the Gujarat State Financial Services Ltd,” the finance minister said.