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In a big relief to infrastructure sector, Finance Minister Nirmala Sitharaman has introduced the National Bank for Financing Infrastructure and Development (NaBFID) Bill 2021 in the Lok Sabha to pave the way for setting up of a government-owned development finance institution to help fund about 7,000 infra projects under the National Infrastructure Pipeline.

The proposed legislation will give effect to the Budget announcement made by the finance minister on February 1. The government has proposed Rs 20,000 crore to capitalise the institution. The Union Cabinet had last week approved the Budget proposal of setting up a development finance institution (DFI), which will have tax benefits to enable fund raising from investors.

The National Bank for Financing Infrastructure and Development will be set up with a corpus of Rs 20,000 crore and the government will give an initial grant of Rs 5,000 crore. The government expects the DFI to leverage this fund to raise up to Rs 3 lakh crore in the next few years.