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‘Loans to grant’ for Govt schemes put to test
With most of the States failing to complete Centre-funded projects in time, Urban Development Ministry has proposed to fund infrastructure development works in the States through a “loans to grant” system to speed up their implementation.
In this direction, the Ministry has already initiated talks with the Planning Commission to examine the viability of the proposal.
“I have spoken about a “loans to grant” system in which we provide loans for a project and once 50 per cent of it is completed, we convert it into grants,” Urban Development Minister Kamal Nath told reporters on Thursday.
The matter has been raised with the Planning Commission to look into its feasibility. "The scheme has worked well in many countries," Nath said.
Projects funded by the Centre often faced the problem of "ownership of execution and ownership of delivery," he said, adding there were times when projects were halted mid way because they did not meet the target milestones and whatever money spent on them also went waste.
"People have come to me with photographs of half finished projects," he said.
"Where is the ownership of this? The state governments feel there is no ownership. The municipality feels there is no ownership. The Central Government also feels there is no ownership," Nath said.
Under the loans to grant scheme the ministry would convert the loan into grants once a project meets a pre assigned milestone.
Nath said his ministry had called representatives of state governments to address these issues so that the second phase of JNNURM scheme can be planned better.
In this direction, the Ministry has already initiated talks with the Planning Commission to examine the viability of the proposal.
“I have spoken about a “loans to grant” system in which we provide loans for a project and once 50 per cent of it is completed, we convert it into grants,” Urban Development Minister Kamal Nath told reporters on Thursday.
The matter has been raised with the Planning Commission to look into its feasibility. "The scheme has worked well in many countries," Nath said.
Projects funded by the Centre often faced the problem of "ownership of execution and ownership of delivery," he said, adding there were times when projects were halted mid way because they did not meet the target milestones and whatever money spent on them also went waste.
"People have come to me with photographs of half finished projects," he said.
"Where is the ownership of this? The state governments feel there is no ownership. The municipality feels there is no ownership. The Central Government also feels there is no ownership," Nath said.
Under the loans to grant scheme the ministry would convert the loan into grants once a project meets a pre assigned milestone.
Nath said his ministry had called representatives of state governments to address these issues so that the second phase of JNNURM scheme can be planned better.
