Government open to buying equity in highway projects, puts PPPs on hold.

The government is open to buying equity in some of the 189 stalled highway projects where Rs. 1.8 lakh crore is locked up due to myriad pending clearances, in a bid to jumpstart the highway sector, which it believes can push up the country's growth rate by at least 2 per cent over the next two years.

The NDA government has also decided to put all public-private partnerships (PPPs) in the road sector on hold for two to three years as just a few infrastructure firms have any capacity to invest in new projects.

With banks having stopped lending to the infrastructure sector, Prime Minister Narendra Modi and finance minister Arun Jaitley are also looking at alternative long-term and lower-cost financing from pension funds like the Rs 7.5 lakh crore Employees' Provident Fund, or EPF.

Most developers are either restructuring their debts or are saddled with projects that have turned into non-performing assets.

ET