Union Budget 2019: Nirmala Sitharaman proposes measures to enhance sources of capital for infrastructure financing

New Delhi: Finance Minister Nirmala Sitharaman proposed to constitute a Credit Guarantee Enhancement Corporation in 2019-20 while presenting the Union Budget in Parliament on Friday.

She said that the government recognises that investment-driven growth requires access to low-cost capital and It is estimated that India requires investments averaging Rs 20 lakh crore every year (USD 300 billion a year). 

The Finance Minister further added that a number of measures are proposed to enhance the sources of capital for infrastructure financing, which are as follows;

A Credit Guarantee Enhancement Corporation for which regulations have been notified by the RBI will be set up in 2019-20.

An action plan to deepen the market for long term bonds including for deepening markets for corporate bond repos, credit default swaps etc., with specific focus on infrastructure sector, will be put in place.

To permit investments made by FIIs/FPIs in debt securities issued by IDF-NBFCs to be transferred/sold to any domestic investor within the specified lock-in period.