Government has taken several steps to mobilize funds from various sources, including from capital market, for development of infrastructure. Steps include launching of innovative financial vehicles such as Infrastructure Debt Funds, Infrastructure Investment Trusts/Real Estate Investment Trusts, laying down a framework for municipal bonds and its issuance, relaxation in External Commercial Borrowing (ECB) norms, mainstreaming of Public Private Partnerships (PPPs), relaxation of norms for Employees’ Provident Funds Organization (EPFO)/pension funds for infrastructure sector, bringing in 5/25 scheme to extend long tenor loans to infrastructure projects, take-out finance and flexible structuring etc. FDI upto 100% under the automatic route has been permitted in Construction Development of Townships, Housing, Built-up Infrastructure which inter-alia include development of townships, construction of residential/commercial premises, roads or bridges, hotels, resorts, hospitals, educational institutions, recreational facilities, city and regional level infrastructure, townships, subject to certain conditions as provided in Consolidated FDI Policy Circular of 2017. The National Investment and Infrastructure Fund (NIIF) has been established with an aim to attract investments from both domestic and international sources for infrastructure development in commercially viable projects, both greenfield and brownfield, including stalled projects.

This was stated by Shri Pon. Radhakrishnan, Minister of State for Finance in written reply to a question in Lok Sabha today.

Infrastructure finance reforms expand instruments and liberalise investment norms to attract long term capital for projects. Government measures to mobilize long term capital for infrastructure emphasize innovative financing instruments (Infrastructure Debt Funds, Investment Trusts/REITs), an enabling municipal bond framework, relaxed External Commercial Borrowing norms, mainstreamed PPPs with take out finance and flexible loan structuring, relaxed institutional investor participation, liberalised Foreign Direct Investment under the automatic route for construction and development activities, and creation of the National Investment and Infrastructure Fund to attract domestic and international investment into commercially viable projects.