India 2018

Finance 233
Financial Stability Board
Financial Stability Board (FSB) was established in 2009 under the aegis of G20
by bringing together the national authorities, standard setting bodies and
international financial institutions for addressing vulnerabilities and developing
and implementing strong regulatory, supervisory and other policies in the
interest of financial stability. India is an active member of the FSB having three
seats in its Plenary.
Infrastructure Financing
Given the enormity of the investment requirements and the limited availability
of public resources for investment in physical infrastructure, it is imperative to
explore avenues for increasing investment in infrastructure through various
sources. In view of this, Government has launched the following to mobilize
the long term investment in infrastructure in the country:
i.) Bank Financing: Banks continue to be major source of financing infrastructure.
RBI has been modifying guidelines for advances to infrastructure including 5/
25 scheme, take out financing.
ii.) Institutional Finance: The Government has also set up India Infrastructure
Finance Company Limited (IIFCL) with the specific mandate to play a catalytic
role in the Infrastructure sector by providing long-term debt for financing
infrastructure projects. IIFCL funds viable infrastructure projects through long
term debt, refinance to banks and financial institutions for loans granted by
them, with tenure exceeding 10 years or any other mode approved by the
government.
iii.) Infrastructure Debt Funds (IDFs): Government of India has conceptualized
Infrastructure Debt Funds (IDFs) to accelerate and enhance the flow of long
term debt into infrastructure projects to help in the migration of project loans
for operating assets from banks to the fixed income markets.
iv.) Real Estate Investment Trusts (REITs)/Infrastructure Investment Trust (InvITs):
These are trust-based structures that maximize returns through efficient tax
pass-through and improved governance structures. Guidelines/Regulations for
InvIT and REIT were notified by SEBI in 2014.
Public Private Partnerships
Availability of quality infrastructure is a pre-requisite to achieve broad based
and inclusive growth on a sustained basis. Infrastructure is also critical for
enhancing productivity and export competitiveness. Given the enormity of the
investment requirements and the limited availability of public resources for
investment in physical infrastructure, the projected infrastructure investments
made it imperative to explore avenues for increasing investments in
infrastructure through a combination of public investment and Public Private
Partnerships (PPPs). PPPs bridge the deficit in financing of infrastructure
projects, and also bring in cost effective new technology for operation and
maintenance of created asset, thus, extracting long term value for proposition.