DFI cleared, to begin with 100% govt ownership
ECONOMY & POLICY

DFI cleared, to begin with 100% govt ownership

The government has cleared a bill to set up a government-owned development finance institution (DFI) with initial paid-up capital of Rs 20,000 crore so that it can leverage around Rs 3 trillion from the markets in a few years to provide long-term funds to infrastructure projects as well as for development requirements of the country.

The Budget 2021 has provided Rs 20,000 crore to capitalise the institution. The DFI funding of infrastructure seeks to support the implementation of the burgeoned infrastructure outlay. As widely expected, a pandemic recovery plan has dominated a 37% increase in planned infrastructure spend.

Sitharaman had announced in the Budget 2021 that the government will have 100% ownership in the new development finance institution (DFI). DFI will start with 100% government ownership and gradually brought down to 26%, Sitharaman had said.

According to the Finance Minister, despite attempts to have alternative investment funds, there were no banks that could take up such a high long-term risk and fund the development.

The proposed DFI will have 50% non-official directors, Sitharaman added. DFI will have certain tax benefits for ten years, she further added.

The central government is also planning to issue securities to the Development Finance Institution, by which the cost of funds will come down.

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

Image Source


Also read: Government to fully own the new DFI

Also read: Infra-Nirbhar webinar to discuss infrastructure funding

The government has cleared a bill to set up a government-owned development finance institution (DFI) with initial paid-up capital of Rs 20,000 crore so that it can leverage around Rs 3 trillion from the markets in a few years to provide long-term funds to infrastructure projects as well as for development requirements of the country. The Budget 2021 has provided Rs 20,000 crore to capitalise the institution. The DFI funding of infrastructure seeks to support the implementation of the burgeoned infrastructure outlay. As widely expected, a pandemic recovery plan has dominated a 37% increase in planned infrastructure spend. Sitharaman had announced in the Budget 2021 that the government will have 100% ownership in the new development finance institution (DFI). DFI will start with 100% government ownership and gradually brought down to 26%, Sitharaman had said. According to the Finance Minister, despite attempts to have alternative investment funds, there were no banks that could take up such a high long-term risk and fund the development. The proposed DFI will have 50% non-official directors, Sitharaman added. DFI will have certain tax benefits for ten years, she further added. The central government is also planning to issue securities to the Development Finance Institution, by which the cost of funds will come down. In the Budget 2019-20, Sitharaman had proposed a study for setting up DFIs for promoting infrastructure funding. Around 7,000 projects have been identified under the National Infrastructure Pipeline (NIP), with a projected investment of a whopping Rs 111 lakh crore during 2020-25. Image Source Also read: Government to fully own the new DFI Also read: Infra-Nirbhar webinar to discuss infrastructure funding

Related Stories

Gold Stories

Next Story
Resources

Schindler named among Forbes’ World’s Best Employers 2026

Schindler has been named among Forbes’ World’s Best Employers 2026, a global ranking recognising companies for their workplace environments.Compiled by Forbes in partnership with Statista, the ranking is based on independent employee feedback, including whether employees would recommend their organisation to friends and family.The company said the recognition reflected its focus on creating a workplace where employees can develop their expertise and build careers. ..

Next Story
Infrastructure Urban

India needs an export-execution mindset: Vishesh Jain

Interview with Vishesh Jain, Founder & CEO, EximpleWhat gaps in India’s global trade ecosystem led you to build Eximple, and what problem did you see businesses struggling with most?Eximple came out of a problem that all three founders had seen from different choke points in the trade ecosystem. India has millions of MSMEs and manufacturers, and many of them can make products that are genuinely competitive on quality. Yet only a small fraction is able to build meaningful international businesses. In our experience, the gap is usually not manufacturing capability; it is the ability to exe..

Next Story
Building Material

Nuvoco reports 13.5% revenue growth in Q2 FY27

Nuvoco Vistas Corp. Ltd. reported consolidated revenue of Rs 27.9 billion for Q2 FY27, up 13.5% year on year. Cement sales volume rose 9% to 4.7 million tonnes (MMT), while EBITDA increased 11% to Rs 4.11 billion.The company said it began its cement operations in 2014 with a 2.3 MMT per annum (MMTPA) operation at Nimbol. It now aims to reach 35 MMTPA of cement capacity by FY28, nearly 15 times its initial capacity. Its portfolio spans cement, ready-mix concrete and modern building materials.On sustainability and cost efficiency, Nuvoco partnered with CleanMax for a 46.4 MW wind-solar hybrid re..

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

SPECIAL OFFER
QR Code