The
approach paper for the Twelfth Plan (2012-17) as approved
by the NDC on October 22, 2011 has indicated that the total investment in
infrastructure would have to be over Rs. 45 lakh crore during the Twelfth
Plan period. The Twelfth Five Year Plan is under formulation. However, the
following steps are being taken to achieve physical and financial targets for
the infrastructure sector:
High Level Committee on
Financing Infrastructure
The
Government has appointed a High Level Committee on Financing Infrastructure
under the chairmanship of Dr. Rakesh Mohan to make a
range of recommendations to enable the requisite flow of investment in
infrastructure during the 12th Five Year Plan. The Committee has set
up four key sub-groups on developing capital markets for intermediating
long-term savings for investment in infrastructure projects, taxation and debt,
foreign capital inflows in infrastructure financing, and flow of equity to infrastructure
projects to make recommendations in their respective areas.
India Infrastructure Finance
Company Limited (IIFCL)
The IIFCL
was set up as a non-banking company for providing long-term loans for financing
infrastructure projects that typically involve long gestation periods. The
IIFCL lends up to 20 per cent of the project costs. The IIFCL has initiated
several new measures such as Take Out Finance Scheme
and Credit Enhancement Scheme besides direct financing of infrastructure
projects.
Infrastructure Debt Funding
(IDF)
India’s
first Infrastructure Debt Fund (IDF) of US $ 2 billion has been launched on
March 5, 2012. This IDF would be structured as a non-banking finance company
with an initial equity share of Rs. 300 crore and is envisaged to expand the availability of debt
to infrastructure projects. Further, a few more IDF’s
are also proposed to be launched soon and by the end of 2012 at least two IDF’s would be functional.
Viability Gap Fund (VGF)
Scheme
To
enhance the financial viability of competitively bid PPP infrastructure
projects, which do not pass the standard thresholds of financial returns, VGF
grant up to 20 per cent of capital costs is provided by the Central Government
to projects undertaken by any Central Ministry, State Government, statutory
entity or local body. An additional grant of up to 20 per cent of the project
costs can be provided by the sponsoring authority.
The 11th Five Year Plan
(2007-12) had projected an investment of Rs. 20,56,150 crore during the Plan
period. As a part of the Mid-Term Appraisal of the Plan, it is estimated that
the investment realized would be Rs. 20,54,205 crore i.e. the Plan
projections would be broadly realized.
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NNK/MD