The Hindu Business Line : Govt, RBI to look at funding options for IIFCL: Chidambaram

New Delhi, Nov. 20 The Finance Ministry and the Reserve Bank of India may look at providing more money to India Infrastructure Finance Company Ltd (IIFCL), a Government-owned company, as part of efforts to boost infrastructure financing in the country.

“The Planning Commission thinks that IIFCL can absorb more money and lend more. We have just been given a note. The RBI and the Finance Ministry will look into the note,” the Union Finance Minister, Mr P. Chidambaram, told newspersons here.

With the developed markets under recession, it is being perceived in certain quarters that IIFCL may find it difficult to raise large quantum of long-term resources from markets abroad. At September-end 2008, IIFCL’s share capital stood at Rs 800 crore.

Meanwhile, briefing newspersons on the first meeting of the Prime Minister’s apex group to look into the effect of international financial crisis, Mr Chidambaram said that by and large the Prime Minister expressed satisfaction at the speed with which RBI acted on the matter.

The Prime Minister advised the RBI Governor to maintain close and constant vigil on the situation, Mr Chidambaram said.

Fiscal stimulus

On the larger question of fiscal stimulus, Mr Chidambaram said that the Prime Minister pointed out that additional cash expenditure of Rs 1,05,000 crore in the supplementary demand for grants was indeed the “fiscal stimulus”.

“We have taken major fiscal stimulus measure. If the department and ministries spend the money allocated to them and still have the capacity to spend more money by March 31, 2009, we are willing to look into their requirements,” he said.

The Finance Minister said that revised estimates were under preparation now and that he had advised the Expenditure Secretary to keep in mind the capacity of ministries to spend more.

“We are confident that they will be able to spend allocated money. If they can spend more, they can certainly come to us. Bulk of expenditure is on social expenditure side,” he said.