Rajya Sabha Passes Finance Bill 2021
The Parliament has passed the Finance Bill 2021 with the approval of Rajya Sabha today, i.e. Thursday, March 25, 2021. The Lok Sabha passed the Bill on Tuesday.
The legislation seeks to establish the National Bank for Financing Infrastructure and Development (NBFID) to support infrastructure financing in the country. This includes the development of bonds and derivatives markets which are necessary for infrastructure financing.
The NBFID will be set up as a corporate body with an authorized share capital of Rs 1 lakh crore with financial and developmental objectives. Financial objectives will be to directly or indirectly lend, invest, or attract investments for infrastructure projects located entirely or partly in India.
Developmental objectives include facilitating the development of the market for bonds, loans and derivatives for infrastructure financing.
Replying to a discussion on the Bill, Finance Minister Nirmala Sitharaman said that the NBFID will prove to be a catalyst for the ecosystem of Infrastructure funding. She said that the Centre envisaged the setting of DFIs after learning the lessons from various similar financing institutes and realizing their contribution towards infrastructure development in the country.
Responding to queries raised by several members, Ms Sitharaman informed that the ambit of developmental projects envisaged to be undertaken by the NBFID includes social sector infrastructure projects including Health & Education. She said a long term infrastructure financial institute like NBFID is necessary to boost the developmental projects.
The Minister informed the house that, over 6,500 projects identified in various sectors require Rs 111 Lakh Crore investments in the country. She said, the new statutory body is answerable to the Parliament and will be managed by the Government appointed Chairman and board nominated professionals.
Earlier participating in the discussion, Jairam Ramesh of Congress Party raised concerns regarding no provision of CAG audit of the proposed Development financing Bank.