13.3.11

Hospitals , schools & colleges get infra status


In a move aimed at encouraging public-private partnerships in hospitals and schools & colleges, the finance ministry has categorised capital spending on them under infrastructure.With the new status, they shall be eligible for viability gap funding or VGF. Finance minister Pranab Mukherjee said, "Investment in education and health sectors has a high priority in our policy framework. Henceforth, capital stock in educational institutions and hospitals will be treated as infrastructure sub-sectors. Accordingly, capital investment for these sub-sectors will be eligible for the VGF scheme of the ministry of finance."He added that detailed guidelines on the same would be announced shortly.VGF is given to make infrastructure projects, which otherwise don't make commercial sense, feasible.The scheme for providing VGF was devised in 2005. The extent of the VGF granted under the scheme may go up to 20% of the total cost of the project. A competitive bidding is done and projects are awarded to the private participants on the basis of the VGF quoted.Talking of inflation, Mukherjee said tackling high inflation is a top priority of the government. In this regard, he announced extension of the interest subvention scheme of providing short term loans to farmers at 7% interest with additional interest subvention for timely repayment to fish farmers and fishermen."This would benefit over 20 lakh fish farmers and fishermen engaged in fishing operations in the country," he added.Stressing on the need to preserve the agriculture produce in the wake of the rising food inflation, Mukherjee informed the house about a slew of measures taken by the government on storage capacity creation."Storage capacity to the tune of 150 lakh metric tonne through private participation has been fast-tracked. A 2.6 lakh metric tonne capacity will be in place by end of this month," he stated.

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