New Delhi (The Hawk): Nitin Gadkari, minister for road transport and highways, stated on Thursday that the nation's first Surety Bond insurance product will be introduced on December 19.
Gadkari made the announcement while speaking at the Global Economic Summit of the CII, noting that the product will be of great assistance to contractors.
The minister stated that the Surety Bond insurance will help inject liquidity into the infrastructure sector by releasing contractors' working capital that is currently encumbered by bank guarantees.
This fund might be used to enhance their (contractors') operations, according to Gadkari.
Estimates indicate that banks request up to fifty percent of cash money margin from small construction companies. This is converted into bank guarantees.
According to sources, the premium likely to be levied for this insurance bond will make it a fair offering.
Gadkari further stated that the timing is now ripe for the Indian economy to expand infrastructure facilities and provide employment chances as a means of combating recessionary tendencies.
(Inputs from Agencies)
