Union Budget 2021: FM Sitharaman proposes steps to increase funding for National Infrastructure Pipeline

Union Budget 2021: Union Finance Minister Nirmala Sitharaman today presented the budget in the parliament for the financial year 2021-22. In her Union Budget 2021-22 speech, the minister said the National Infrastructure Pipeline (NIP) which was announced in December 2019 is the first-of-its-kind, whole-of-government exercise ever undertaken by the Indian government. According to the Finance Minister, the NIP was launched with as many as 6835 projects. Now, the project pipeline has been expanded to a total of 7,400 projects. So far, nearly, 217 projects worth Rs 1.10 lakh crores under some key infrastructure ministries have been completed, Sitharaman said.

While presenting the Union Budget for fiscal 2021-22, FM Sitharaman said the NIP has a specific target which the Modi government is committed to achieving over the coming years. The NIP will need a major increase in funding both from the government as well as the financial sector. In this year’s Union Budget, the Finance Minister proposed to take concrete steps to do this, in three ways. The first is, by creating the institutional structures. The second way is by a big thrust on monetizing assets, and the third is, by enhancing the share of capital expenditure in central as well as state budgets.

According to Sitharaman, the infrastructure sector requires long term debt financing. For infrastructure financing, a professionally managed Development Financial Institution is necessary to act as a provider, enabler as well as a catalyst, she stated. Accordingly, the minister said that she will introduce a Bill to set up a DFI. The Finance Minister has provided a sum of Rs 20,000 crores to capitalise this institution. The government’s ambition is to have a lending portfolio of at least an amount of Rs 5 lakh crores for this DFI in three years’ time, the FM said in her budget speech.