Govt to announce norms for infra debt fund by June-end

The government may explore the capital market route to allow foreign investors in the proposed infrastructure debt fund, Economic Affairs Secretary R Gopalan said today.

The finance ministry is working on the guidelines for the infrastructure debt fund, and these are likely to be finalised by June-end. Regulators are trying to see how such funds could be launched without disturbing current norms, Gopalan said at a function organised by industry chamber Assocham.

“A lot of preparatory work has gone into this. There are two kinds of routes we are looking into. One is the bond route to infra debt funds, and the other is the unit route through capital markets,” he said.

In Budget 2011-12, Finance Minister Pranab Mukherjee had announced the setting up of such funds through special purpose vehicles to attract foreign investment in the infrastructure.

India plans to invest $1 trillion in ports, highways, power utilities and telecom infrastructure over the next five years. A comprehensive policy framework for public private partnerships for infrastructure and social sectors like health and education is also on the cards. The policy framework would lay down the guidelines for new private players and the implementation of infrastructure projects.

“The regulators are working very hard and trying to see how we do not upset the existing regulations and still, try to come out with the fund. Perhaps, in the next few months, we would be in a position to achieve what we intend to this year,” Gopalan said.

Finance ministry officials say the fund may take the form of a company, as well as trust to issue bonds and units, respectively. Sebi would regulate companies, while the RBI would regulate trusts.