Budget 2021: Govt to set up Rs 20,000 cr DFI to promote infra financing

FM Sitharaman said the govt will set up a Rs 20,000 crore Development Finance Institution with a view to mobilise Rs 111 trn required for funding of the ambitious national infrastructure pipeline

Finance Minister Nirmala Sitharaman on Monday said the government will set up a Rs 20,000 crore Development Finance Institution (DFI) with a view to mobilise Rs 111 lakh crore required for funding of the ambitious national infrastructure pipeline.

Unveiling the Union Budget 2021-22, the Finance Minister said that a professionally managed DFI to be set up to provide, enable and catalyze infrastructure financing.

The government proposes Rs 20,000 crore to capitalise this institution and aims to have lending portfolio of at least Rs 5 lakh crore in three years, she said.

In her Budget 2019-20 speech, Finance Minister Nirmala Sitharaman had proposed a study for setting up DFIs for promoting infrastructure funding. About 7,000 projects have been identified under the National Infrastructure Pipeline (NIP) with projected investment of a whopping Rs 111 lakh crore during 2020-25.

NIP, a first-of-its-kind initiative to provide world-class infrastructure across the country and improve the quality of life for all citizens, will be crucial for attaining the target of becoming a USD 5 trillion economy by FY 2025.

The DFI will play a key developmental role apart from the financing role.