Delhi Transport Minister Gopal Rai said the move to revive ring railways will boost public transport system in the city.
He added that to further enhance public transport by speeding-up the phase-III of Delhi Metro, the AAP Government will extend an advance reimbursement of estimated Value Added Tax (VAT) to Delhi Metro Rail Corporation (DMRC) in the form of long-term loan to the tunes of Rs1,546 crore.
Gopal Rai said the Government will extend the loan in three installments Rs646 crore in 2015-16, Rs450 crore in 2016-17 and Rs450 crore in 2017-18. The decision was taken at a Cabinet meeting chaired by Chief Minister Arvind Kejriwal on Wednesday.
As per existing norms, the Delhi Metro Rail Corporation (DMRC) has to pay VAT on purchase of every item during the ongoing projects to the city Government, which later reimburses the amount after verifying all purchases.
“We used to reimburse the VAT amount paid by the DMRC, but the process would consume more time and often cause delay to projects. For instance, the Government had reimbursed the VAT amount, which was to be paid in 2010 to Metro, in 2014… As per the new rule, we will extend interest-free loan in advance which the Metro used to give to the Government in forms of VAT,” Rai said.