In a major fillip to the success of infrastructure bonds, the government has decided to exempt them from getting the credit ratings — which are mandatory for all the other kinds of bond issuances.
With an aim to encourage the investment flow to the all-important infrastructure sector, the union Budget for the current financial year had provided for tax benefits in the long-term infrastructure bonds.
Taking forward the issue, the government has begun the process of allowing the issuance of tax-free infrastructure bonds by selected Non-Banking Financial Companies (NBFCs).
However, the grant of permission for issue of such bonds has omitted the requirement of credit ratings, sources said.
In any bond issuance exercise, the issuer has to generally get the bond rated by two different credit rating agencies, so the investors get an idea about the risk profile of the bond.
