Union Cabinet approves bill to set up Development Finance Institution with Rs 20,000 cr initial capital

The proposed legislation will give effect to the Budget announcement made by Finance Minister Nirmala Sitharaman on 1 February

Press Trust of India March 16, 2021 16:32:54 IST
Union Cabinet approves bill to set up Development Finance Institution with Rs 20,000 cr initial capital

File photo of Union finance minister Nirmala Sitharaman. PTI

New Delhi: The Union Cabinet on Tuesday approved a bill to set up a Development Finance Institution (DFI) to generate funds for investment in the infrastructure sector.

The proposed legislation will give effect to the Budget announcement made by Finance Minister Nirmala Sitharaman on February 1. The government has proposed Rs 20,000 crore to capitalise on the institution.

"The Cabinet has cleared this bill, through which we will have an institution and institutional arrangement, which will help in increasing long term funds," she said after the meeting of the Cabinet.

The proposed DFI will have 50 percent, non-official directors, Sitharaman added.

In her Budget 2019-20 speech, Sitharaman had proposed a study for setting up DFIs for promoting infrastructure funding. About 7,000 projects have been identified under the National Infrastructure Pipeline (NIP) with a projected investment of a whopping Rs 111 lakh crore during 2020-25.

Updated Date: