Government to fully own the new DFI

Government to fully own the new DFI

The government will have 100% ownership in the new development finance institution (DFI), proposed by Finance Minister Nirmala Sitharaman in the Union Budget 2021, the Department of Economic Affairs, Ministry of Finance (MoF) has stated.

Economic Affairs Secretary Tarun Bajaj told media sources that initially the DFI will be fully government-owned, and will, later on, get more stakeholders depending on its financing needs.

Debashish Panda, Financial Services Secretary, had earlier this week stated that the DFI would be named the National Bank for Financing Infrastructure and Development, or NBFID.

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Citing the long term-debt financing needs of infrastructure, the Finance Minister had said during the budget that a professionally managed development finance institution (DFI) is necessary to act as a provider, enabler and catalyst for infrastructure financing.

The Union Budget 2021-22 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 spending. The plan includes a capital expenditure (capex) target of Rs 5.54 lakh crore for 2021-22, compared with a revised estimate of Rs 4.39 lakh crore for 2020-21.

Image: The Union Budget provides Rs 20,000 crore as capital for the DFI, to be named the National Bank for Financing Infrastructure and Development, or NBFID.

Also read: Infra budget sought, infra budget granted

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