India To Get Dedicated Infra Lender As Cabinet Clears Bill On Setting Up DFI With Capital Infusion Of Rs 20,000 Cr 

The Union Cabinet on Tuesday cleared a budgetary proposal to set up a government-owned development finance institution (DFI) with initial paid-up capital of Rs 20,000 crore, reports Business Standard.

The DFI is expected to give a massive lending push worth around Rs 3 lakh crore in the next few years which will provide long-term funds to infrastructure projects as well as for development needs of the country.

Notably, Rs 3 lakh crore amounts to slightly less than 3 per cent of the Rs 111 trillion to be spent on over 7,000 projects in the National Infrastructure Pipeline from 2019-20 to 2024-25.

Addressing the media after the cabinet meeting, Sitharaman said that the DFI will be managed by a professional board and is expected to attract capital from the market.

The DFI was proposed in the Union Budget 2021-22 by Finance Minister Nirmala Sitharaman.

A development finance institution provides risk capital for key infra projects. It is considered as a key ingredient for a sustainable and fast infra creation.