Pvt-sector DFIs to be provided five-year tax relaxation

19 Mar 2021 Editorial Team

A government official told a prominent media source that the government would move an amendment to the income tax act to provide the tax holiday, when the Finance Bill is taken up in the Parliament for passage.

The cabinet on Tuesday approved the National Bank for Financing Infrastructure and Development (NaBFID)—the state-run DFI proposed in the budget and a bill for the creation of government-owned as well as private DFIS. The DFI bill will soon be introduced in the Parliament.

The Centre plans for the NaBFID to enjoy a 10-year income tax holiday and receive a Rs 5,000 crore grant as cash or marketable securities in lieu of tax-free bonds.

Certain asset transfers to DFIs will also get stamp duty relief, a government official said.

The Reserve Bank of India (RBI) will regulate DFIs and formulate rules for them. DFIs set up in the private space in the 1990s were converted into scheduled commercial banks as they struggled with long-term infrastructure financing challenges.

The government is keen to ensure that DFIs succeed this time, given the need for such funding, by creating a facilitative framework. DFI will also support credit enhancement mechanisms, provide project development and monitoring, and help develop the bond market, thereby nurturing the overall infrastructure financing ecosystem. The National Infrastructure Pipeline (NIP) has pegged the funding requirement at over Rs 111 lakh crore till 2025.

Image Source

Also read: DFI cleared, to begin with 100% govt ownership

Also read: Government to fully own the new DFI

The government has decided to provide a five-year income tax holiday to private sector development finance institutions (DFIs) to build a robust funding infrastructure system. They will join a state-owned DFI that's being set up. A government official told a prominent media source that the government would move an amendment to the income tax act to provide the tax holiday, when the Finance Bill is taken up in the Parliament for passage. The cabinet on Tuesday approved the National Bank for Financing Infrastructure and Development (NaBFID)—the state-run DFI proposed in the budget and a bill for the creation of government-owned as well as private DFIS. The DFI bill will soon be introduced in the Parliament. The Centre plans for the NaBFID to enjoy a 10-year income tax holiday and receive a Rs 5,000 crore grant as cash or marketable securities in lieu of tax-free bonds. Certain asset transfers to DFIs will also get stamp duty relief, a government official said. The Reserve Bank of India (RBI) will regulate DFIs and formulate rules for them. DFIs set up in the private space in the 1990s were converted into scheduled commercial banks as they struggled with long-term infrastructure financing challenges. The government is keen to ensure that DFIs succeed this time, given the need for such funding, by creating a facilitative framework. DFI will also support credit enhancement mechanisms, provide project development and monitoring, and help develop the bond market, thereby nurturing the overall infrastructure financing ecosystem. The National Infrastructure Pipeline (NIP) has pegged the funding requirement at over Rs 111 lakh crore till 2025. Image Source Also read: DFI cleared, to begin with 100% govt ownership Also read: Government to fully own the new DFI

Infrastructure Transport

12 Mar 2026

Kavach 4.0 Commissioned on Delhi–Mumbai and Delhi–Howrah

"Kavach version four has been commissioned on 1,452 route km, covering the high density Delhi–Mumbai and Delhi–Howrah corridors. The rollout included laying 8,570 km of optical fibre, installation of 1,100 telecom towers, deployment of trackside equipment over 6,776 RKm and establishment of 767 station data centres. Trackside implementation has been taken up on 24,427 RKm covering Golden Quadrilateral, Golden Diagonal and High Density Network sections. The programme aims to strengthen signalling and train protection on key routes.Kavach is an indigenously developed automatic train protecti..

Infrastructure Transport

12 Mar 2026

Railways Advance Kalyan–Murbad Line And Mumbai Capacity Expansion

"Indian Railways is advancing multiple rail infrastructure projects in Maharashtra, including the sanctioned Kalyan–Murbad new line and sizable investments under the Mumbai Urban Transport Project and the Mumbai–Ahmedabad High Speed Rail project. The Kalyan–Murbad 28 km new line has been sanctioned at Rs 8.36 billion (bn) on a 50:50 cost-sharing basis with the Government of Maharashtra and has been declared a Special Railway Project for land acquisition; proposals covering 214 hectares are at various stages of acquisition. Budgetary outlay for projects falling fully or partly in Maharash..

Infrastructure Urban

12 Mar 2026

Parliamentary Panel Flags Funding Gaps in Heavy Industries

"The Department-Related Parliamentary Standing Committee on Industry (Rajya Sabha) presented its 332nd report on the Demands for Grants 2026-27 of the Ministry of Heavy Industries (MHI). Figures converted from crore and lakh are expressed in million (mn). The Budget Estimates 2026-27 for the Ministry stand at Rs 79,399 mn against a projected requirement of Rs 94,843.2 mn, a shortfall of about 16 per cent, with revenue at Rs 79,370.8 mn and capital compressed to Rs 28.2 mn from Rs 5,020 mn.The committee flagged recurring BE-to-RE compression and declining revised estimate utilisation, and calle..