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Modi Cabinet Clears Proposal To Set Up Development Finance Institution, Will Help Raise Rs 3 Lakh Crore
Prime Minister Narendra Modi with Finance Minister Nirmala Sitharaman.
The Narendra Modi led Central cabinet has cleared a bill to be tabled in the parliament for setting up of a Development Finance Institution (DFI).
The setting up of DFI was announced by the Finance Minister in her budget speech this year.
“For 2021-22, the government will infuse Rs 20,000 crore into the DFI, including Rs 5,000 crore to be given immediately”, said the finance minister.
Adding that the expectations are that the institute will raise 3 lakh crore from the market and other sources.
The institute will enjoy tax benefits for up to 10 years.
An amendment will also be made in the Indian stamp act, to attract the big pension funds and sovereign funds to invest in the DFI along the lines of their National Infrastructure Investment Fund (NIIF) investment.
Sitharaman said that with the help of initial leverage and funds the DFI will able to “reach out, and support long term projects”.
She hoped that this (DFI) will have a positive impact on the bond market as well.
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