NEW INSTITUTION FOR FINANCING INFRA PIPELINE

The Union government will set up a Development Finance Institution (DFI) for the long-term financing of its ambitious ₹111 lakh crore National Infrastructure Pipeline (NIP), finance minister Nirmala Sitharaman said on Monday while presenting the Union Budget in Parliament.

“The proposed DFI will have a lending portfolio of at least ₹5 lakh crore in three years’ time,” Sitharaman said, announcing that the government had allocated a sum of ₹20,000 crore to capitalise this institution.

“Infrastructure needs longterm debt financing. A professionally managed Development Financial Institution is necessary to act as a provider, enabler and catalyst for infrastructure financing. Accordingly, I shall introduce a Bill to set up a DFI,” she said in the budget speech.

The government has already announced its ambitious ₹111 lakh crore NIP, which will require debt financing of at least ₹60-70 lakh crore in the next four-five years.ht reported on January 19 that the creation of a DFI was likely for this purpose in Budget 2021-22.

“The National Infrastructure Pipeline, which I announced in December 2019, is the first-ofits-kind, whole-of-government exercise ever undertaken by the Government of India. NIP was launched with 6,835 projects; the project pipeline has now expanded to 7,400 projects. Around 217 projects worth ₹1.10 lakh crores under key infrastructure Ministries have been completed,” Sitharaman said.

A finance ministry official who asked not to be named said that apart from funding new projects, such an institution could also help revive stalled projects worth at least ₹10 lakh crore.