The proposed Vizhinjam deepwater port and international transhipment terminal in Kerala has become the first to be granted viability gap funding (VGF) by the Centre. A decision to this effect was taken at a meeting of an empowered panel under the Union Finance Ministry recently.
In the last June-quarter, government-owned banks recovered only Rs 1,416 crore from loan defaulters while adding more than twice that amount by way of non-performing assets during the same period. Such recoveries have mostly come from smaller borrowers, even as the Union Finance Ministry is focused on the top 30 non-performing accounts in public sector banks.
To augment capital base of its public sector undertaking banks, the Union Finance Ministry on October 22 finalised a Rs 14,000-crore infusion plan, the Union government announced on October 22. The Union Finance Minister P Chidambaram said this after meeting the heads of PSU banks in Delhi.
The National Highways Authority of India (NHAI) has suggested the Union Highways Ministry to see that the road project contracts are cancelled amicably than wasting time in trying to revive the projects. And it also urged the Ministry to deal with the developers in a way that the project contracts are cancelled amicably.
To provide insurance cover to Indian domestic refineries that process crude oil imported from Iran the process of setting up of a Rs 2,000-crore fund has begun by the Union Finance Ministry. The Finance Ministry's act comes after the the Union Petroleum Ministry agreed to provide the required money to being in fund.
To meet global capital requirement norms (or Basel III norms) of public sector banks in the country, the Union Finance Ministry is likely to finalise Rs 14,000-crore capital infusion into the banks by the end of this month. An official concerned said that the government has received capital requirement proposals from all public sector banks and it is evaluating their proposals at the moment. Hopefully, capital allocation to banks would be finalised by August-end.
The Union Finance Ministry has urged the Reserve Bank of India to consider a change in its stance that treats loans to road projects as unsecured. If the RBI sheds its reluctance to treat highway sector lending as secured loans, credit flows to the fund-starved sector could grow by at least 20 per cent-25 per cent, officials said.
Through its Pre-Budget Memorandum submitted to the Union Finance Ministry, industry body CII urged government to take urgent steps to make infrastructure sector viable and capable of attracting capital. The memorandum listed some of the steps that the government should take to attract capital into the sector. For example, the body wants government to waive Minimum Alternative Tax (MAT) for infrastructure companies.