This refers to your article “NHAI to issue land bonds for acquisition from states" (November 19). The procedure converts expenditure into investment for rational utilisation of the fiscal resources by both the Centre and the states. Improvement in infrastructure is a job in progress as the economy develops and requirements change. The outright purchase of land involves heavy expenditure by the National Highways Authority of India (NHAI) when land is purchased at substantial cost especially in urban areas. It is a wasteful outflow of capital for NHAI and consequently, a financial risk. Such funds can instead be ploughed back as capital for productive deployment. Additionally, bonds are debt instruments payable on demand. Bonds will not be demanded back wholesale by states and stakeholders and funds can thus be utilised prudently benefiting both the NHAI and the states. The former acquires capital and the latter interest earnings. The states in turn can convert such interest revenue into capital for their internal economic development. Such rotation of funds will help both sides.
C Gopinath Nair Kochi
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