In a move to accelerate the flow of long-term investments in various infrastructure projects and to provide a boost to country’s infrastructure development, the government is planning to establish infrastructure trust fund soon. This infrastructure fund is to be set on the same lines, as the Real Estate Investment Trust (REIT) prevalent in other countries. Under the infrastructure trust fund structure, underlying revenue of projects will be transferred to a trust and the trust will then issue units to investors, including foreign investors, who want to buy the units.
The government has identified development of infrastructure in the country a most critical prerequisite for supporting the growth momentum of the economy. It has been taking various measures to help fund the infrastructure sector, which is estimated to require around $1 trillion investment for the 12th Five Year Plan (2012-17).
The government has also introduced Infrastructure Debt Fund (IDF), which is aimed at accelerating and enhancing flow of long term debt for funding infrastructure development. Recently, India Infrastructure Finance Company (IIFCL) launched its first Infrastructure Debt Fund (IDF) with targeted initial corpus of $1 billion. Further, in order to speed up the implementation of infrastructure projects, the government has also set up Cabinet Committee of Investment (CCI) and special project monitoring group. Furthermore, ‘Public Private Partnership (PPP)' programme has also been implemented in order to bring in adequate resources for setting up of a sound and efficient infrastructural base.
