Banks, FIs need to design project-specific products for meeting NIP target: DFS Secretary

Banks and FIs need to design products in sync with requirements of infra projects for meeting Rs 111 lakh crore NIP target, said Vivek Joshi
Banks, FIs need to design project-specific products for meeting NIP target: FS Secretary
Banks, FIs need to design project-specific products for meeting NIP target: FS Secretary

New Delhi: Banks and financial institutions need to design products in sync with requirements of infra projects in view of the whopping Rs 111 lakh crore National Infrastructure Pipeline (NIP), said Vivek Joshi, Financial Services Secretary on Thursday.

Observing that the infrastructure sector has strong backward and forward linkages with the robust multiplier effect across the sectors, he said, "NIP along with other initiatives like Make in India, Production-Linked Incentive scheme is poised to catapult India to a USD five trillion economy."

'NIP projects with a total outlay of Rs 111 lakh crore are being monitored'

Under the aegis of PM Gati Shakti portal, he said, "NIP projects with a total outlay of Rs 111 lakh crore are being monitored. The NIP, which started with 6,800 projects, has now expanded to over 9,000 projects covering 34 infrastructure sub-sectors."

"While 44 percent of investment is funded through the central and state budgets, banks, financial institutions and Development Finance Institutions (DFIs) are expected to play a crucial role in financing of these projects with a share of about 30 percent," he said while addressing an event marking the 18th foundation day of state-owned IIFCL.

'There is a need for proactive and synergetic approach to be adopted by banks, FIs and the DFI'

"To achieve this objective there is a need for proactive and synergetic approach to be adopted by banks, FIs and the DFI. It is only then that the crowding out of investments can be avoided, and projects of national importance will be able to access timely and reasonable financing," he added.

"The government has committed a Rs 5,000-crore grant over and above the Rs 20,000crore equity capital for NaBFID. For public institutions operating in this space, it is important to offer a mix of equity and debt products on alternative term without impacting each other's efforts to expand business," said Joshi.

"Meeting financing needs of new infrastructure with products which are in sync with project reality is need of the hour. Institutional capacity to serve projects across current and emerging sub-sectors should be constantly evaluated. Here institutions like IIFCL can play a leading role," he said.

(PSU Watch– India's Business News centre that places the spotlight on PSUs, Bureaucracy, Defence and Public Policy is now on Google News. Click here to follow. Also, join PSU Watch Channel in your Telegram. You may also follow us on Twitter here and stay updated.)

logo
PSU Watch
psuwatch.com