FinMin nudging banks to fund large infrastructure projects: DFS Secretary

FinMin nudging banks to fund large infrastructure projects: DFS Secretary Nagaraju

The Finance Ministry is asking banks to step up their involvement in financing large-scale infrastructure projects, which are essential for India's goal of becoming a developed nation (Viksit Bharat) by 2047. Highlighting the viability and revenue-generating potential of such projects, M Nagaraju, Secretary, Department of Financial Services (DFS), emphasised the need for greater collaboration between banks and infrastructure financing companies.

Speaking at the National Summit on Indian Infrastructure for Viksit Bharat 2047, organised by the India Infrastructure Finance Company Ltd (IIFCL) on its 20th Foundation Day, Nagaraju said, “The Finance Ministry is asking banks to finance new large infrastructure projects. We are advising banks to pick up large-scale infra projects.”

Nagaraju pointed out that infrastructure projects are typically viable if there is no fraud, funds are not diverted, and there are no timelines. “When we finance infrastructure, most projects are revenue-generating and viable if there is no fraud, and funds are not diverted,” he said.

He also underscored the importance of renewable energy financing, calling for banks and other stakeholders to focus on innovative approaches to fund these projects.

Nagaraju urged greater participation in infrastructure financing, given the scale of the country's needs.

“Infrastructure financing companies and banks need to work together to finance large-scale projects. More players can enter this space as India’s infrastructure requirements are vast,” he added.

He lauded the progress made by India Infrastructure Finance Company Limited (IIFCL) in the past four years, citing significant recovery achievements. The institution, according to Nagaraju, has a critical role to play in achieving the vision of Viksit Bharat, with a target to lend at least Rs 1 lakh crore over the next three years.

Nagaraju outlined three key areas for IIFCL to concentrate on: Developing new financing instruments tailored to the evolving needs of infrastructure projects, identifying and adopting innovative funding strategies and strengthening governance for better efficiency and transparency.

“IIFCL should focus on innovative products, new finance mechanisms, and a robust governance structure to support the vision of a developed India by 2047,” he said.