The Parliament on Thursday passed a bill to set up a National Bank for Financing Infrastructure and Development (NaBFID). The aim is to fund the infrastructure projects across the country under the guidance of Finance Minister Nirmala Sitharaman.
Finance Minister To Present NaBFID Audit Reports Yearly
As per the reports, Finance Minister Nirmala Sitharaman has said that the institution will present audit books to both the Houses every year. Rajya Sabha passed the bill by a voice vote on Thursday and Lok Sabha passed the bill on Tuesday.
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However, during the debate about the bill, some of the members raised concerns over the “lack of parliamentary oversight” and said that the proposed legislation should have a committee for thorough study.
Furthermore, Section 26 of the bill says that the Institution shall provide the Central Government with the account documents within four months from the date the accounts officially get closed and balanced. This makes the NaBFID answerable to the parliament.
The bill will provide assistance towards infrastructure financing in India.
Sitharaman explained that the private development finance institutions gets a five year tax break to enhance the flow of funds. However, they should be smart enough to compete.
She further said that they have provided a capital of Rs 10 lakh crores, Rs 20,000 crores has been given in equity and Rs 5000 crores as grant. The institution will further access a line of credit from the Reserve Bank of India.
She further added that in the 2019 Budget announced an investment for Rs 100 lakh crores for the infrastructure within the next five years. And by the end of the year, the government set up a national infrastructure pipeline which included 700 infrastructure projects. However, the new one is not just about the roads and bridges but will include hospitals and schools.
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Finance Minister Assures Credible Framework
While talking about the new development, the finance minister said that development finance take time and is a risky project. It further requires higher credibility. She assured that the new bill will ensure a credible framework for debt and equity investment.
“It will attract investment from both domestic and global institutional investors as we as domestic retail investors. We are not depending on just FDIs,” she told the House.
