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The shipping ministry has a number of suggestions for the finance ministry ahead of the Union Budget 2015-16, expected in February.
Nitin Gadkari, minister for road transport, highways and shipping, said on Thursday there was a dire need for restructuring of shipping companies’ debt. Gadkari said the finance ministry should talk to banks for more flexibility towards the shipping 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.”
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Gadkari was speaking at FICCI-organised India Maritime 2015 held here on Thursday.
Apart from this, he also suggested that shipping companies earning in dollars should be offered loans in the same currency as it can lower the interest rate burden to two or three per cent. Currently, shipping companies are paying about 10 per cent interest over the rupee loans they have taken.
According to Gadkari, there should be more tax exemption for the sector to beef up companies' earnings.
“For instance, the registration of ships overseas is tax-free while in India it is taxed. So shipping companies prefer getting ships registered outside india,” he said.
Under the ministry's ambitious plans to improve connectivity through the Sagar Mala ports project, shipping secretary Rajive Kumar said, “The contours of the project will be ready by the end of January.”
The Sagar Mala project would lead to holistic development in many areas including ship repair, ship-building, port facilities, goods and passenger terminals and development of logistical infrastructure, Gadkari noted.
“While a lot of focus has until now been placed on the country's railways and roads, not much development has been achieved so far in the maritime sector. The Sagar Mala project will correct that anomaly. Once safe inland waterways are developed, the large number of road accidents that lead to loss of life and property will be reduced considerably,” Gadkari added.
The shipping ministry is also mulling setting up dry ports in Maharashtra, Haryana and Punjab, which will enhance connectivity even via road and rail. Gadkari also put forth the idea of state governments working with the Centre to develop new ports along the 7,000-km coastal line.
The shipping minister has also sought suggestions from shipping-sector players.
