Norms for infrastructure debt funds by June-end

PTI New Delhi | Updated on May 11, 2011 Published on May 11, 2011

Mr R. Gopalan, Secretary, Economic Affairs. (file photo)   -  The Hindu

The Finance Ministry has said guidelines for infrastructure debt funds are likely to be announced by June-end, which will help the core sector meet its financing requirement, pegged at $1 trillion during the 12th Plan (2012-17).

“We are at work (on infrastructure debt fund). I am hopeful that we will be in a position to complete (it) by June-end. We are sorting out the glitches,” the Department of Economic Affairs Secretary, Mr R. Gopalan, said at a FICCI meet here today.

In the Budget for 2011-12, the Finance Minister, Mr Pranab Mukherjee, had announced that the Government will facilitate the establishment of dedicated infra debt funds through special purpose vehicles for attracting foreign investment in the infrastructure sector.

The Government is aiming at the creation of more than one such debt fund, which will provide low-cost funds from abroad for financing the growth of the infrastructure sector.

In June 2010, an expert panel headed by the HDFC Chief, Mr Deepak Parekh, had recommended setting up of such a fund with an initial corpus of Rs 50,000 crore to meet the financial needs of the sector.

Mr Gopalan further said the Reserve Bank of India was at an advance stage of finalising the guidelines for a corporate bond market.

“The RBI is in final stages to come out with some path forward to make the corporate bond market more active and alive,” he said.

A corporate debt market enables private industry to raise funds through debt instruments and channelise these into specific sectors, including infrastructure.

The country’s poor infrastructure, which is seen as a major bottleneck for economic growth, requires an investment of $1 trillion in the 12th Plan, beginning 2012 and ending 2017. Of this, it expects 50 per cent to come from the private sector.

Published on May 11, 2011
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