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J&K Govt to borrow Rs 1500 crore from open market to complete languishing projects

Srinagar: Jammu and Kashmir government has decided to borrow Rs 1,500 crore from open market to complete languishing developmental projects in the union territory.

Hundreds of projects have witnessed no progress over the years due to the insufficient funds or scant budgetary allocation from the Centre.

To ensure that these projects are completed by the next financial year, Jammu and Kashmir Infrastructure Development Finance Corporation (JKIDFC) has been given a go-ahead to borrow money from open market, a senior finance department official told The Kashmir Monitor.

To resume work and complete the projects, JKIDFC  has invited expressions of interest (EOI) from reputed banks, financial institutions registered with Reserve Bank of India for lending Rs 1,500 crore to J&K government at an interest rate of 8.5 percent.

“JKIDFC has already raised Rs 3,000 crore, which has been exhausted after the corporation cleared the dues.  Now it has been mandated to raise Rs 8,000 from the market to fund the languishing projects” said a finance department official.

As per the EOI by the JKIDFC, the amount is to be raised within the remaining months of the current financial year. 

“The bidders are requested that the maximum rate of interest decided by the authorities is 8.5%. The bidders are accordingly informed to quote the rate of interest at which they will offer the debt/loan along with the amount they are prepared to invest during January-March 2020-21 and April – May 2021-22,” reads an EOI issued by the JKIDFC’s Director of Finance.

According to EOI, the loan of Rs 1,500 crore to be raised, which is guaranteed by dedicated revenue streams of the J&K government includes revision of taxes under the Jammu and Kashmir (Motor Spirit and Diesel Oil) (Taxation of Sales) Act by revising the rate of tax on sale of diesel from 16% minus Rs. 2.5 per liter to 16% minus Rs. 0.5 per liter. 

“Increase in one-time road tax at 9% for motor vehicles. Increasing efficiency of collection of water connection charges by way of covering all the unregistered consumers and improving collection efficiency to 100%, increasing revenue realization by making full use of permissible limit of 80 lakh cft of extraction of timber,” the EOI reads.

Jammu and Kashmir Infrastructure Development Finance Corporation (JKIDFC) is a Registered Corporation under the Companies Act, 2013. The Corporation is mandated to raise loan up to Rs 8,000 crore for funding Infrastructure Development in Jammu and Kashmir.

The Corporation was established as per the decision taken by the State Administrative Council (SAC) on September 5, 2018, to provide a fillip to the developmental activities across Jammu and Kashmir.

Meanwhile, sources said the administration has started collecting the details of every languishing project and a time frame is being set to complete it at the earliest.

“An exercise has been conducted at the district level, which focused on the number of incomplete projects of prime importance. After the amount is raised, a time frame will be set to complete the projects. This will pave way for sanctioning new projects in the coming financial year,” they said.