STAFF REPORTER / WEB DESK
Finance Minister Nirmala Sitharaman today said the government has approved the proposal to set up a Rs 20,000 crore Development Finance Institution (DFI) with a view to mobilise fund required for funding of the ambitious national infrastructure pipeline.
Initial grant for DFI will be Rs. 5,000 Cr, additional increments of grant will be made within the limit of Rs. 5,000 Cr.
“During Budget 2021, we had mentioned that we will be setting up a national bank to fund infrastructure and developmental activities, and the government has approved it today”, said Finance Minister Sitharaman today.
The DFI will help raise long-term funds; #Budget2021 will provide initial amount Capital infusion will be of about Rs. 20,000 Cr this year; initial grant will be Rs. 5,000 Cr, additional increments of grant will be made within the limit of Rs. 5,000 Cr.
DFI will have a professional board
At least 50% of the members will be non-official Directors
Persons of eminence are envisaged to be on the board
We are making sure that Board will be such as to meet the requirements of 21st century – FM
‘The institution will help raise considerable amount from market. With initial capital infusion of Rs. 20,000 Cr, we expect it to raise upto Rs. 3 Lakh Cr in next 5 years, since DFI will be able to access funds which are otherwise not available’, said minister.
We have quite a few banks, but we need banks which will be able to scale up.We need many more banks of the size of SBI, to meet the aspirational needs of the country,: FM
“We have announced a Public Enterprise Policy, where we have identified 4 areas where public sector presence will be there, in this, financial sector too is there So, not all banks are going to be privatized “
Interests of workers of banks which are likely to be privatized will absolutely be protected – whether their salaries or scale or pension, all will be taken care of , assures Finance Minister
DFI is expected to raise long-term funds for infrastructure development projects in the country. Briefing reporters after the Union Cabinet meeting, Finance Minister Nirmala Sitharaman said that the initial grant to the DFI will be 5 thousand crore rupees and additional increments of grants will be made within the limit of 5 thousand crore rupees. She said, the Government is also planning to issue some securities to this Institution by which the cost of funding will come down and all this will help DFI leverage initial capital which draws funds from various sources.
She said through this the government is expected to raise a considerable amount from the market. The Finance Minister said, the DFI is expected to raise up to 3 lakh crore rupees in the next few years. The Institution will also have some tax benefits for a 10-year long period and the Indian Stamp Act too is being amended.
About the structure of the Development Finance Institution, Ms Sitharaman said that it will have a professional board in which there will be at least 50 per cent of them will be non official director and person of eminence is also envisaged in the board.
She said that the government is looking at a complete professional set up of the DFI and with this professional human resource, the Organisation will rise to the expectation of the market.