The Finance Minister, Mr Pranab Mukherjee, has said that the Government is considering further liberalisation of the country’s foreign direct investment policy for attracting investment in the infrastructure sector.
“Discussions are underway to also liberalise the FDI policy (for infrastructure sector),” he said at an IIF event here today.
Highlighting the importance of development of the infrastructure sector in the country, the Finance Minister said the FII investment limit in corporate bonds have been liberalised and special vehicles in the form of notified infrastructure debt funds with certain tax concessions have been announced for the development of this critical sector.
These majors would improve the flow of resources to the infrastructure sector. The infrastructure sector requires an investment of $1 trillion in the 12th Plan, beginning next year (2012-17).
During the Budget speech, Mr Mukherjee had said: “To enhance the flow of funds to the infrastructure sector, the FII limit for investment in corporate bonds, with a residual maturity of over five years issued by companies in the infrastructure sector, is being raised by an additional limit of $20 billion, taking the limit to $25 billion.”
This will raise the total limit available to FIIs for investment in corporate bonds to $40 billion.
“Infrastructure is critical for our development. For 2011-12, an allocation of over Rs 2,14,000 crore is being made for this sector, which is 23.3 per cent higher than the current year. This amounts to 48.5 per cent of the Gross Budgetary Support to Plan expenditure,” he had said.