'Expect rollout of long-term infra debt fund this budget'

The government is considering various options to create an infrastructure debt fund, Finance Minister Pranab Mukherjee said on January 19, as part of the government's efforts to create long-term funds for the infrastructure sector.

Last June, the Planning Commission had proposed to set up a USD 11 billion infrastructure debt fund that could tap sovereign and insurance funds to finance building roads and utilities. A committee headed by HDFC Chairman Deepak Parekh had also submitted a report that recommended that the proposed infrastructure debt fund be allowed to re-finance upto 85% of outstanding debt of infrastructure projects. The long-term debt fund is expected to bring down interest costs and user charges associated with infrastructure projects. In an interview with CNBC-TV18's Economic Policy Editor Siddharth Zarabi, Vinayak Chatterjee, Chairman of Feedback Ventures spoke on his expectations from the finance minister for the infrastructure sector from Budget 2011. Below is a verbatim transcript. Also watch the accompanying video. Q: What is the sector's demand from Budget 2011? A: The first is that India requires a long term debt fund for infrastructure. All of us have been discussing in the media, in seminars that there is an asset liability mismatch from the commercial banks. Therefore, the government appointed a committee headed by Mr Deepak Parekh and that committee created the idea of a Rs 50,000 crore debt fund. When President Obama came that same idea was picked up, and the US whole-heartedly supported the idea and said we will participate, we will contribute and it was called the USD 11 billion debt fund. So, the first thing in this budget we are expecting that idea to get rolled out. Q: In what form? A: By announcing exactly when developers and promoters can start accessing money from that long term debt fund. That