New Delhi: The Plan Panel has asked the finance ministry to examine the possibility of setting up several infrastructure debt funds (IDFs) to fund core sector development activities in the country, which are estimated to cost $1 trillion during the 12th Five Year Plan (2012-17), reports PTI.
Following up on the suggestions made during the recent visit of US president Barack Obama to India, Planning Commission deputy chairman Montek Singh Ahluwalia has written a letter to finance minister Pranab Mukherjee suggesting modification of the regulatory framework and also on the need to exempt IDFs from payment of withholding tax.
“It would be very good idea if we can have not just one debt fund... (but) several debt funds. In order to make it possible, you need several regulatory relaxations or modifications. I have sent a note to the finance minister giving my assessment. I believe that it is being examined in the finance ministry,” Mr Ahluwalia told reporters.
During Mr Obama’s visit last month, the governments of India and US gave in-principle approval to a proposal from the industry to set up a $10 billion infrastructure fund.
Mr Ahluwalia said India needed several debt funds to finance infrastructure sector activities in the 12th Five Year Plan, as 50% of the total $1 trillion investment required during the 2007-12 period would have to come from the private sector.
The Planning Commission deputy chairman also made out a case for exempting debt funds from payment of withholding tax, as the levy would make their operation unviable. Withholding tax is the amount that is required to be deducted by an entity while paying interest on borrowings.
Inside story of the National Stock Exchange’s amazing success, leading to hubris, regulatory capture and algo scam
Fiercely independent and pro-consumer information on personal finance.
1-year online access to the magazine articles published during the subscription period.
Access is given for all articles published during the week (starting Monday) your subscription starts. For example, if you subscribe on Wednesday, you will have access to articles uploaded from Monday of that week.
This means access to other articles (outside the subscription period) are not included.
Articles outside the subscription period can be bought separately for a small price per article.
Fiercely independent and pro-consumer information on personal finance.
30-day online access to the magazine articles published during the subscription period.
Access is given for all articles published during the week (starting Monday) your subscription starts. For example, if you subscribe on Wednesday, you will have access to articles uploaded from Monday of that week.
This means access to other articles (outside the subscription period) are not included.
Articles outside the subscription period can be bought separately for a small price per article.
Fiercely independent and pro-consumer information on personal finance.
Complete access to Moneylife archives since inception ( till the date of your subscription )
