Fuel for economic growth
Through various amendments, the government is trying to
open up more sources of investments in the infrastructure
sector, besides equity infusion in the NIIF infrastructure
debt financing platform. Over a period, these investments
will collectively reflect economic development.
urag Singh Thakur, Union Minister of State for AFinance and Corporate Affairs has said recently in the
parliament that the government has been contemplating infusing more investments prioritising growth of infra
and health sectors to streamline the economy. For this, he says
the government has taken various steps.
For enabling debt financing of Infrastructure Investment Trust (InvITs) and Real Estate Investment Trusts (REITs) by Foreign Portfolio Investors included in the Finance bill 2021 the government amended Securities Contract (Regulation) Act, 1992 along with consequential amendments in the SRFAESI Act, 2002 and the Recovery of Debts and Bankruptcy Act, 1993. Similarly, the government brought amendments to Section 2 (48) of the Income Tax Act to enable Infrastructure Debt Funds to issue zero-coupon bonds in the Finance Bill 2021.
In the budget 2020-21, it granted 100 per cent tax exemptions to foreign Sovereign Wealth Funds (SWF) and Pension Funds on their income from investment in Indian infrastructure, including NBFC registered as an infrastructure finance
company or as infrastructure debt fund, a domestic company with more than 75 per cent investment infrastructure.
The cabinet last year had approved an equity infusion of ₹6,000 crores in the NIIF infrastructure debt financing platform, consisting of Assem Infrastructure Finance (AIFL) and NIIF Infrastructure Finance (NIIF-IFL). The capital infusion will help substantially scale up the two institutions that specialize in infrastructure financing, which can attract both debt and equity investors who are keen to be associated with infrastructure.
NIIF was created in the year 2015 to attract equity investments from both domestic and international sources for infrastructure development in commercially viable projects, both greenfie and brownfield, including stalled projects.