Topics Covered: Infrastructure.
Cabinet gives nod to Bill for setting up DFI:
Context:
The Union Cabinet has approved a Bill to set up a Development Finance Institution – National Bank for Financing Infrastructure and Development (NaBFID).
Background:
The government had mentioned in the Budget that it would be setting up a national bank for funding infrastructure and development activity.
Key facts:
- NaBFID will be set up with a corpus of ₹20,000 crore and an initial grant of ₹5,000 crore from the government.
- Initially, it will be wholly owned by the Government but the Government stake will be lowered to a quarter.
- It will also enjoy some tax benefits for an initial 10-year period and some amendments will be carried out in the Indian Stamp Act in this regard.
- It will have a professional board and at least 50% of members will be non-official directors.
- An eminent person will be appointed chairperson.
Need for:
- To mobilise the ₹111 lakh crore required for funding of the ambitious national infrastructure pipeline.
- To enhance credit rating of projects. It would fund projects where others are not willing to enter because of the risks involved.
InstaLinks:
Prelims Link:
- About NaBFID.
- What is NIP? When was it launched?
- Projects covered under NIP.
- Key recommendations made by task force headed by Atanu Chakraborty on NIP.
- Three committees proposed to be set up as per the recommendations made by Task Force.
- What is India Investment Grid?
Mains Link:
Discuss the significance and features of NIP.
Sources: the Hindu.
