The Shipping Ministry seems to be engaged in drawing up slew of suggestions to be given to the Finance Ministry ahead of union budget 2015-16 scheduled end february.
Noting the debt ridden situation of the shipping companies, Shipping Minister Nitin Gadkari today said there is dire need for restructuring of loans to shipping companies and hence has proposed to Finance Ministry to talk to banks for more flexibility towards the sector.
“I have suggested that there should be a five year moratorium period for loans on existing as well as new projects followed by a three year grace period and then a 25 year debt repayment tenure.”
Gadkari was speaking at FICCI organised India Maritime 2015 held here today.
Apart this, the minister has suggested that shipping companies earning in dollars should be offered loans in the same currency as it can lower the interest rate burden to 2-3%.
Currently, shipping companies are paying over 10% interest over the rupee loans they have. Gadkari has also suggested more tax exemption for the sector to beef up companies’ earnings.
“For instance, registration of ships overseas is tax free while in india it is taxed so shipping companies prefer getting ships registered outside of india. “
Shipping companies alone are not responsible for the situation they are in and so the government is also willing to help them out.
Under the ministry’s ambitious plans of improving connectivity through the Sagar Mala ports project, shipping secretary Rajive Kumar said, “the contours of the project will be ready by end of January.”
The shipping ministry is also mulling setting up of dry ports in Maharashtra, Haryana and Punjab which will up connectivity even via road and rail. Gadkari also put forth the idea of state government working jointly with the central to develop new port along the 7,000 km coastal line.