Karnataka has sought permission for irrigation infrastructure companies and Bengaluru Metro Rail to raise tax-free bonds.
“I would like to draw your attention to certain other economic policy issues related to irrigation infrastructure companies of the state government and the Bengaluru Metro Rail are not being permitted to raise tax free bonds,” said Chief Minister Siddaramaiah, in a letter written to Union Finance Minister Arun Jaitley.
“On the other hand, Central infrastructure financing companies that have been permitted to raise such bonds do not pass on the benefit of lower interest rates to these companies. This way, the purpose of such bonds is not being served. Therefore I request you to allow these companies to raise tax free bonds on their own,” he requested.
The letter to Union Finance Minister was handed over by HC Mahadevappa, State PWD Minister, at the Union Finance Minister’s pre-budget meeting with State Finance Ministers.
The Chief Minister said, “The city is one of the main drivers of the national economic growth. It is imperative that the Central government should shoulder the responsibility equally with the state government towards the goal of saturating the infrastructure requirements such of such mega cities over plan period itself.”
Urging the Centre to be creative in finding solutions, Siddaramaiah said “This kind of focused approach should be supported with substantial Central funds duly supplemented by innovative means of financing like accessing capital market and sourcing private sector funds through public private partnerships (PPP).”