The Union Health Ministry has decided to keep in abeyance its proposed plan for floating a bond issue to raise Rs.5000 crore for making available the necessary funds to improve the infrastructure for healthcare, medical research and family welfare. According to sources, the Union Health Ministry has decided to delay the floating of the bond. No specific reason has been given for the delay.

The Union Health Ministry had announced that it would enter the financial market with a special Rs.5000 crore bond issue to bridge the yawning gap between the need and availability of resources for improving the infrastructure for health care, medical research and family welfare.

It had subsequently shortlisted Industrial Development Bank of India (IDBI) and ICICI Securities (I-Sec) for creating and managing the charge to the proposed Rs. 5000 crore bond issue. Though it sent its proposal to the two shortlisted companies it did not move further in this regard. In the meanwhile the Union Health Ministry has seen a shuffle with Shatrugan Sinha taking over the mantle from Dr. C.P. Thakur, who was the brainchild behind the proposed bond issue.

It was for the first time the Health Ministry contemplated such a bond. The bond was to be secured by creating a charge on the assets in favour of the bondholders. This charge was to be rated to inspire confidence and attract a wide range of investors. The bond were also be listed on the stock exchanges to impart liquidity and income-tax benefits. The proposed bond was envisaged to be a fixed rate instrument with a duration of seven years and with a call and put option.