Union Cabinet has approved a bill to set up Development Finance Institution (DFI) with an initial capital infusion of 20 thousand crore rupees.The bill will be tabled in Parliament during the current Budget Session.
DFI is expected to raise long-term funds for infrastructure development projects in the country. 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.
Further, she said through this the government is expected to raise a considerable amount from the market. 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.