Dicussions underway to relax infra sector FDI policy: FM

According to Finance Minister Pranab Mukherjee, government is mulling over liberalising the country's foreign directinvestment policy in order to give a boost to infrastructure sector by increase in investment. The infrastructure sectorrequires an investment of $1 trillion in the 12th Plan, beginning next year (2012-17).

"Discussions are underway to also liberalise the FDI policy (for infrastructure sector)," Mukherjee said at an IIFevent here. He further stated that this can be achieved as the government has liberalized the FII investment limitsin corporate bonds and announced special vehicles in the form of notified infrastructure debt funds with certain taxconcessions. In the infrastructure sector, the FII limit has been raised to $25 billion with residual maturity of overfive years issued by companies. This move will additionally raise the total limit available to the FIIs for investment incorporate bonds to $40 billion.

"Infrastructure is critical for our development. For 2011-12, an allocation of over Rs 2,14,000 crore is being made forthis sector, which is 23.3 per cent higher than the current year. This amounts to 48.5 per cent of the Gross BudgetarySupport to plan expenditure," Mukherjee had accentuated.