Funds to be raised from markets for infrastructure

The State Cabinet on Wednesday approved a scheme for raising funds from the financial markets for infrastructure development.

Funds will be mobilised for immediate, medium-term, and long-term requirements as recommended by a committee chaired by State Planning Board Vice Chairman K.M. Chandrasekhar in its report submitted to the government early this month.

A bill discounting system will be introduced to pay arrears, totalling around Rs.2,000 crore, to public works contractors. Instead of cash, the contractors will be issued ‘I Owe You’ instruments with irrevocable government guarantee. These could be discounted through banks. When the banks present the instrument to treasury, indication will be given as to when the payment could be drawn.

General obligation bonds and revenue bonds will be issued for implementing medium-term projects.

Amendments to the rules will be brought to designate Kerala Infrastructure Investment Fund Board and Kerala Road Fund Board as sponsors.