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India To Get Dedicated Infra Lender As Cabinet Clears Bill On Setting Up DFI With Capital Infusion Of Rs 20,000 Cr
Union Finance Minister Nirmala Sitharaman
The Union Cabinet on Tuesday cleared a budgetary proposal to set up a government-owned development finance institution (DFI) with initial paid-up capital of Rs 20,000 crore, reports Business Standard.
The DFI is expected to give a massive lending push worth around Rs 3 lakh crore in the next few years which will provide long-term funds to infrastructure projects as well as for development needs of the country.
Notably, Rs 3 lakh crore amounts to slightly less than 3 per cent of the Rs 111 trillion to be spent on over 7,000 projects in the National Infrastructure Pipeline from 2019-20 to 2024-25.
Addressing the media after the cabinet meeting, Sitharaman said that the DFI will be managed by a professional board and is expected to attract capital from the market.
The DFI was proposed in the Union Budget 2021-22 by Finance Minister Nirmala Sitharaman.
A development finance institution provides risk capital for key infra projects. It is considered as a key ingredient for a sustainable and fast infra creation.
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