Trust between govt, industry critical to leverage opportunities created by COVID, says Finance Minister Nirmala Sitharaman

Finance Minister Nirmala Sitharaman on Monday said that the trust between government and industry is critical for leveraging the opportunities thrown up by the COVID-19 pandemic while assuring that the proposed DFI, the National Bank for Infrastructure Financing and Development (NaBFID), will become functional soon.

This trust is also reflected in the government's actions, she said while addressing members of industry chamber CII here.

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Elaborating on the government's strategy for handling the pandemic, the minister said that on one hand the focus is on ramping up vaccination as that was the biggest protection against the pandemic while on the other hand the government is working on ramping up health infrastructure, including in the tier 2 and tier 3 cities, by supporting the private sector.

The Finance Minister expressed confidence that the announced disinvestment plan is on track.

Sitharaman in her 2021-22 Budget speech, had announced a big-ticket privatisation agenda, including privatisation of two public sector banks and one general insurance company.

The Centre budgeted Rs 1.75 lakh crore from stake sale in public sector companies including strategic sale of IDBI Bank, BPCL, Shipping Corp, Container Corporation, Neelachal Ispat Nigam Ltd, among others.

She also assured that the Development Finance Institution (DFI) announced in the budget would be operational soon.

Liquidity is no longer a major concern, and that the Bank-NBFC-MFI channel has been de-clogged and from October 15 there would be a special drive to reach out credit to those who need it, she said.

Parliament earlier this year passed a Bill to set up a Rs 20,000 crore DFI with a view to mobilise Rs 111 lakh crore required for funding of the ambitious national infrastructure pipeline (NIP), which has over 7,000 greenfield and brownfield projects.

There were at least three or four attempts in the past to have alternative investment funds (AIFs), but gradually either they changed their nature of business or became reluctant to take long-term risk.