Mumbai: Union minister Nitin Gadkari voiced reservations over seeking Foreign funds for infrastructure projects and said he would prefer to raise money from the common man, including professionals, and promised them interest on their investment.
He favoured taking deposits from retired personnel, poor people, teachers and police constables to fund these projects and said their money would be returned with a good interest.
“I think we do not want investments from foreigners. We’ll take deposits from the retired, the poor, teachers and constables and return the money to them,” Mr Gadkari told the gathering at the centenary celebrations of the Saraswat Cooperative Bank, the largest cooperative lender in the country.
The Union minister for road transport said the government was keen to build projects in the EPC (engineering, procurement and construction) mode.
Since the late 1990s, the PPP (public-private partnerships) mode, wherein a private entity builds a project on behalf of the government, has come to define the infra landscape in the country.
Mr Gadkari said the commoners’ money would be returned and the interest paid would be more than what the banks offered, which would serve as a security.
“We will give them more interest than the banks, so that they get the security,” the minister said.
He listed out the construction of 55 flyovers, the Bandra-Worli Sealink and the Mumbai-Pune Expressway during his stint as PWD minister in the Shiv Sena-BJP government in Maharashtra (1995-99) as a precedent of commoners’ money getting channelled for building mega projects.
Without specifying how the government was financing it, he said his ministry had decided to build the Rs.-44,000 crore Mumbai-Vadodara Expressway in the EPC mode and added that the work on it should start soon.
“It is a secure sector, you get money from the toll. I told the nationalised banks that I did not have any limitation of funds and could work in the EPC mode.” Mr Gadkari said there was a tremendous appetite for investing in infra projects backed by the government and added that market experts had told him about the ability to arrange up to Rs. 5 trillion in eight days.
He cited the recent success of the Cochin Shipyard IPO (Initial Public Offering), which was oversubscribed by 76 times and got proposals of up to Rs. 1.25 trillion, to illustrate his point.
Mr Gadkari urged the Reserve Bank of India not to merge the co-operative banks with private lenders, underpinning the need to maintain their character.
“Please do not convert the cooperative banking movement into private banks by merging them. If there are some mistakes, make qualitative changes and make them more powerful,” he said.
Addressing the gathering, Maharashtra Chief Minister Devendra Fadnavis endorsed Mr Gadkari’s view of raising own funds rather than relying heavily on foreign funds. “For that, we need clean projects, transparency and it has to be dynamic,” he said.
Mr Fadnavis touched upon the RBI’s role as a regulator in borrowing and controlling interest rates, saying, “The RBI also needs to review its practice of keeping high-cost borrowings. Borrowing costs are going down across the world.
You cannot always be conservative. A regulatory body has to be bold enough to grow.
“Just lower the borrowing cost by 1 per cent and Maharashtra alone can borrow up to Rs. 1 trillion for infra projects with assured returns on investments,” the chief minister said.