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Updated: July 5, 2013 23:07 IST

AAI to issue Rs.1,000 cr tax-free bonds to develop airports

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A file picture of Airports Authority of India (AAI) chairman, V.P. Agarwal.
A file picture of Airports Authority of India (AAI) chairman, V.P. Agarwal.

Days after the government’s move to construct 51 low-cost airports across the country, the Airports Authority of India (AAI) has decided to issue tax-free bonds worth Rs.1,000 crore in the current financial year.

“The amount realised will be used to finance development of small airports. It would strengthen the financial position of AAI to build these airports,” AAI Chairman V. P. Aggarwal said here.

Of the 51 low-cost airports, AAI was planning to start work on 15 airports this calendar year itself, he said, adding that an inter-ministerial group (IMG), set up for this purpose, had discussed the issue of appointing a consultant at their first meeting on Thursday.

The government had last week decided to set up the 51 airports to enhance air connectivity to small cities in Andhra Pradesh, Jharkhand, Bihar, Punjab, Uttar Pradesh, Assam, Arunachal Pradesh, Madhya Pradesh, Rajasthan and Maharashtra.

Those investing in these bonds, which normally have a long-term maturity plan like a decade, would get tax benefits. In this year’s budget speech, Finance Minister P. Chidambaram had said that state-run bodies such as AAI could issue such bonds up to Rs.50,000 crore.

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