NHAI's debt reduction plan:
The Parliamentary Standing Committee on Transport has expressed concern over the rising debt burden and interest liabilities of NHAI.
NHAI’s debt servicing liability stands at ~Rs 97,115 crore in the next three years. This is a major threat to the road construction activities in the country. As things stand, India is already behind schedule by nearly four years in completing its projects under Bharatmala Pariyojana.
In order to reduce its debt liability, NHAI needs to speed up its asset monetization program. NHAI was authorized to monetize its highway projects for the first time back in 2016. But, it has been moving at a snail's pace since then.
There has been a proposal to set up Infrastructure Investment Trust (InvIT) to help NHAI in its asset monetization plans. However, nothing concrete has materialized yet.
Vehicle recall policy:
After a long wait, the government has issued a notification about recalling the old vehicles. Under this, the government has proposed to increase the charge for renewing vehicles that are older than 15 years.
It has proposed to increase the fees for two-wheelers older than 15 years to Rs 1,000. Meanwhile, the charge for light motor vehicles has been set at Rs 7,500.
Similarly, Rs 10,000 will be charged for medium goods or passenger motor vehicles. And, Rs 12,500 will be charged for heavy goods or large passenger motor vehicles.
With this policy, the government is aiming to reduce the number of old vehicles. They in turn would be replaced by vehicles that are more compliant with pollution norms. However, these measures are appearing to be inadequate as they are lacking any major incentive for vehicle owners to scrap their old vehicles.
Keeping the yield curve down:
The RBI governor, in an interview with Economic Times, has talked about the importance of keeping the rising yield curve in check.
The governor mentioned that it is important not just to manage the government's borrowing program; But to ensure that the borrowing cost remains low. It is very important to support the ongoing economic revival.
These comments have come at an opportune time. Even the Fed Chairman in his latest speech has tried to pacify the bond market by committing to keeping the monetary policy loose. Same commitment from the RBI governor should go a long way in soothing the nerves.