Friday, March 11, 2011

AAI to spread wings with R10k-cr via tax-free bonds



The Airports Authority of India (AAI), which runs 125 airports across the country, is optimistic about raising around R10,000 crore via issuing tax-free bonds in financial year 2011-12, sources said. The proceeds will be used to upgrade 35 non-metro airports, whose development has been shelved in the past due to unavailability of funds. Finance minister Pranab Mukherjee had announced in the Budget 2011-12 that issuance of tax-free infrastructure bonds worth R30,000 crore will be allowed in the ensuing financial year.
Ajay Prasad, former secretary of civil aviation, told FE, “AAI is AAA rated and there should not be any problem for it to raise funds via tax-free bonds.”

In this case, tax-free bonds will be offered by AAI to encourage public investment in government-based projects. These bonds will be low-risk in nature and unlike other investments, the interest earned is exempted from taxes. Also, these bonds will create a good opportunity...







By
Neha Jain



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