The government will table a bill on the new infrastructure lender in Parliament on Monday
New Delhi: Finance Minister Nirmala Sitharaman to table a bill to implement the new project development finance institution – The National Infrastructure and Development Finance Bank (NABFID) bill, 2021 – in Lok Sabha on Monday.
The minister will seek to introduce the bill establishing the new infrastructure lender that will support the “development of long-term non-recourse infrastructure finance in India,” according to Lok Sabha’s list of activities on Monday.
The bill provides for the development of bond and derivative markets necessary to finance infrastructure and operate infrastructure finance business, Lok Sabha said.
A senior government official said the bill also provided for a five-year tax break for private development finance institutions. The state-run NABFID will receive tax breaks for ten years.
Earlier this week, the union’s cabinet approved the bill authorizing the creation of NABFID which will raise capital in the market and provide long-term debt for infrastructure projects. The central government has allocated ₹20,000 crore in FY22 budget as equity support for the lender. Sitharaman’s February budget said the goal was to have a loan portfolio of at least ₹5 trillion for this institution in about three years.
The new institution will have a professional board of directors establishing market-related compensation and will have the power to hire and fire full-time directors. At least half of the board members will be unofficial directors, including prominent figures.
Sitharaman also said earlier this week that Prime Minister Modi is keen to give effect to the budget announcements quickly so that the economic recovery can gain momentum and sustain it. Lok Sabha will also discuss the 2021 finance bill on Monday.