Giving a fillip to infrastructure development in the country, the union budget of 2021-22 has expanded the National Infrastructure Pipeline (NIP) covering 6835 projects to 7400 projects. NIP was announced in December 2019. “Out of the total projects, around 217 projects worth Rs 1.10 lakh crores under some key infrastructure Ministries have been completed,” said Finance Minister Nirmala Sitharaman.
The NIP is a specific target which the government is committed to achieving over the coming years.
It will require a major increase in funding both from the government and the financial sector. The programme will require an increase in funding from the government as well as the financial sector, she said. For this, the government has proposed to take three concrete steps. Firstly, it will create the institutional structures, followed by giving a thrust on monetizing assets, and finally by enhancing the share of capital expenditure in central and state budgets.
“Infrastructure needs long term debt financing. A professionally managed Development Financial Institution is necessary to act as a provider, enabler and catalyst for infrastructure financing. Accordingly, I shall introduce a Bill to set up a DFI. I have provided a sum of `Rs 20,000 crores to capitalize this institution. The ambition is to have a lending portfolio of at least `5 lakh crores for this DFI in three years’ time,” said the finance minister.
She added that Debt Financing of InVITs and REITs by Foreign Portfolio Investors will be enabled by making suitable amendments in the relevant legislations. It would further ease access of finance to InVITS and REITs, thus augmenting funds for infrastructure and real estate sectors.
