<b>Tax-free relief bonds for quake-hit Gujarat

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Tax-free relief bonds for quake-hit Gujarat Wednesday, February 28, 2001

NEW DELHI: The Gujarat government will be allowed to raise funds by floating tax-free earthquake relief bonds, finance minister Yashwant Sinha announced on Wednesday.

The bonds would be open to subscription in rupees to individuals and others including non-resident Indians through the Reserve Bank of India, Sinha said while presenting the 2001-02 budget in the Lok Sabha.

He said the Centre had also made arrangements with the World Bank and Asian Development Bank for obtaining a line of credit of US $800 million forrehabilitation measures in the quake-hit state.

While the National Housing Bank and HUDCO had set apart adequate funds for housing reconstruction, the finance minister also proposed to allocate a special quota of tax-free bonds of the order of Rs 2000 crore between the two institutions.

He said the national calamity contingency fund, set up with an initial corpus of Rs 500 crore, was being augmented by imposition of a two per cent surcharge on personal income tax and corporate tax.

While Rs 500 crore was made available to Gujarat immediately after the January 26 quake from the fund, further assistance would be provided to the state government under various centrally-sponsored schemes for reconstruction of roads, bridges, power installations, school buildings, public utilities and other public infrastructure, he said.
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