Infrastructure
Tackling Funding Gaps: Finance Minister Advocates New Mechanism For Urban Infrastructure Investments
Cities in a rapidly urbanising world face the urgent challenge of delivering high-quality urban infrastructure.
Finance Minister Nirmala Sitharaman on Sunday (16 July) underlined the need for embracing innovative strategies to attract private investment, bridge financing gaps and foster sustainable development of infrastructure in cities.
The Minister highlighted the challenges faced in financing infrastructure in cities during the 'G20 Infrastructure Investment Dialogue'.
These challenges have been exacerbated by the tightening of monetary policy in key markets.
The tightening of monetary policy has led to an increase in interest rates and a growing burden of debt repayment. In order to address the funding gaps, there is significant potential in exploring new funding mechanisms for cities.
“It can complement the pool of funds available for infrastructure in addition to public investment and financing provided by Multilateral Development Banks (MDBs),” Sitharaman added.
The Minister also made a case for developing an ecosystem to improve the credit-worthiness of urban local bodies through appropriate policy and regulatory framework.
"We need alternate solutions to leverage private sector participation in this context. Innovative financing instruments such as blended finance, structured project finance, securitisation, thematic bonds, biodiversity offerings and local currency finance, are some of the needs," Sitharaman said.
Cities in a rapidly urbanising world face the urgent challenge of delivering high-quality urban infrastructure.
According to Sitharaman, the current urban population accounts for 55 per cent of the world's total, and this is projected to rise to 68 per cent by 2050.
To accommodate this growth, significant investment in infrastructure will be necessary.
The Minister highlighted that the GIFT International Financial Services Centre (IFSC) has been designated as a special international financial jurisdiction with reliable business regulations and a competitive tax structure that prioritises ease of doing business, as per the ET report.
GIFT IFSC has 400+ registered entities across various business segments, including banking, capital markets, insurance, fintech, aircraft leasing, and bullion exchange, with increasing participation from international and domestic financial institutions.
Support Swarajya's 50 Ground Reports Project & Sponsor A Story
Every general election Swarajya does a 50 ground reports project.
Aimed only at serious readers and those who appreciate the nuances of political undercurrents, the project provides a sense of India's electoral landscape. As you know, these reports are produced after considerable investment of travel, time and effort on the ground.
This time too we've kicked off the project in style and have covered over 30 constituencies already. If you're someone who appreciates such work and have enjoyed our coverage please consider sponsoring a ground report for just Rs 2999 to Rs 19,999 - it goes a long way in helping us produce more quality reportage.
You can also back this project by becoming a subscriber for as little as Rs 999 - so do click on this links and choose a plan that suits you and back us.
Click below to contribute.
Latest
