PremiumNew Delhi: Finance minister Nirmala Sitharaman will table a bill to set up the proposed new development finance institution-- The National Bank for Financing Infrastructure and Development (NABFID) Bill, 2021 -- in Lok Sabha on Monday.
The minister will seek to introduce the Bill to establish the new infrastructure lender which will support the “development of long term non-recourse infrastructure financing in India," according to Lok Sabha’s list of business for Monday.
The Bill will provide for development of the bonds and derivatives markets necessary for infrastructure financing and to carry on the business of financing infrastructure, Lok Sabha said.
A senior government official said that the Bill also provides for five-year income tax break to private development finance institutions that will come up. State-run NABFID will enjoy tax breaks for ten years.
Earlier this week, union cabinet cleared the Bill allowing the creation of NABFID which will raise capital from the market and offer long term debt to infrastructure projects. The central government has allocated ₹20,000 crore in FY22 budget as equity support for the lender. Sitharaman’s February budget had said the aim was to have a lending portfolio of at least ₹5 trillion for this institution in about three years.
The new institution will have a professional board drawing market linked remuneration and have powers to hire and fire whole time directors. At least half of the board will be non-official directors including persons of eminence.
Sitharaman also said earlier this week that Prime Minister Modi is keen to give effect to budget announcements swiftly so that the economic stimulus gains momentum and sustains it. Lok Sabha will also discuss the Finance Bill, 2021 on Monday.
