Finance Minister Nirmala Sitharaman Friday announced that a Credit Guarantee Enhancement Corporation will be set up in the current fiscal to deepen the long-term bond market.
"A Credit Guarantee Enhancement Corporation, for which regulations have been notified by the RBI, will be set up in 2019-20," Finance Minister Nirmala Sitharaman said while presenting the Union Budget 2019-20.
A number of measures are proposed to enhance the sources of capital for infrastructure financing, the minister said.
"We recognise that investment-driven growth requires access to low cost capital. It is estimated that India requires investments averaging Rs 20 lakh crore every year (USD 300 billion a year)," she said.
An action plan to deepen the market for long term bonds, including corporate bond, repos and credit default swaps, among others, with specific focus on infrastructure sector, will be put in place, the minister said.
"It is proposed to permit investments made by FII (Foreign institutional investors)/ FPI (Foreign portfolio investments) in debt securities issued by Infrastructure debt fund -Non-Bank Finance Companies (IDF-NBFCs) to be transferred/sold to any domestic investor within the specified lock-in period," the minister added.
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