Interim Finance Minister Piyush Goyal on Monday said long-term bonds could be considered to ensure better cash flow for infrastructure projects.

According to Goyal, long- term infrastructure bonds of 20-25 years tenure with fixed coupon rate, will ensure better cash flow to projects without additional risks to the financial sector.

Banks currently lend to infra projects for 10-15-year tenure on an average.

“It (long-term infrastructure bonds) is a thought. I spoke to a senior official of one of the largest banks and have seeded this thought,” he said at an interactive session organised by the Indian Chamber of Commerce here on Monday.

“Today, people are not able to park their money for long term in a good asset. Have long-term bonds for a fixed coupon, this way projects can also plan their cash flows better,” he said.

In the past development financial institutions (DFIs) such as IFCI, IDBI and ICICI, provided long-term funding support for infrastructure projects.

However, when DFIs were done away with in the late 1990s and early 2000, infrastructure financing became a stress point for banks.

“I am worried about long-term financing in India after the transformation of financial institutions like ICICI and IDBI into universal banks,” he said adding that long term bonds could also provide a stable income flow to retired persons.

GST rate

Goyal brushed aside the demand by some political parties for a single GST rate slab, calling it a “ridiculous suggestion”.

The Congress Party has been demanding for a uniform 18 per cent rate under GST replacing the current rates of 5 per cent, 12 per cent, 18 per cent and 28 per cent.

“It (one rate of tax) is a ridiculous suggestion. It really amuses me…if we were to have one rate (18 per cent) then the billionaires will be required to pay less and the poor and middle class will be required to pay higher tax,” he said.

Earlier, the Minister participated in a review meeting with coal and rail officials. According to sources, he stressed on timely completion of the residual work of the Tori-Shibpur and Mand Raigarh line. Both the lines are now partially open.

Coal output

Sources said Goyal appreciated the robust growth in coal production this fiscal but insisted on stepping up supplies at a higher rate to meet rising energy demand in the country.

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