Union Cabinet Approves Bill To Set Up Development Finance Institution

In an attempt to generate funds for investment in the infrastructure sector, the Union Cabinet on Tuesday approved a bill to set up a Development Finance Institution (DFI). The Centre has also proposed Rs 20,000 crore to capitalise 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," Union finance minister Nirmala Sitharaman said on Tuesday.

The institution will have 50 per cent non-official directors, she added.

The proposed legislation will give effect to the Budget announcement made by the finance minister on February 1.

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.

(With PTI inputs)