The Finance Minister in his budget speech has announced to set up a Development Financial Institute. Government has approved this project on 16 March, 2022. DFI Bank has been set up to develop the country’s infra projects. The purpose of this bank is to provide funds to promote the country’s infra projects. There will be borrowing projects of Rs 5 lakh crore within three years. It has been announced in the budget that Railways, NHAI, Airport Authority will now have the power to pass many projects at their own level. The Finance Minister announced a budget of more than 5 lakh crores for capital expenditure.
This step of the government will boost economic development. Because this will increase capital flow and the capital markets will be active. In the long run also, this will lead to financial improvement. It will also help in increasing the availability of credit for construction and housing projects.
Development financial institutions are generally created to fund development projects in developing countries. The source of capital of these banks is National or International Development Fund. With this, funds are provided at a competitive rate in different development projects.
RBI had stated in the year 2017 that such a specialized bank would help in meeting the long-term financing needs of India’s fast growing economy. Not only this, the funding gap will also be reduced in the long run. That is, with the advent of the Development Financial Institute, it will be easier to solve the social, cultural, regional, rural and environmental concerns of the country.
Dr. Shyam
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