Source: Reuters/Adnan Abidi
Source: Reuters/Adnan Abidi

NEW DELHI: The government is ready to launch the National Infrastructure Investment Fund (NIFF) — with an initial corpus of at least Rs 40,000 crore — with two two large overseas funds expected to sign up commitments of at least $1billion (around Rs 6,700 crore) each next month, a top government official said.

“In 2016, you will see NIIF as a very active investor in the infrastructure sector and it will invest for the long term. The fund will invest in greenfield, brownfield as well as stalled projects. We have identified a shelf of infrastructure projects, especially in the transportation sector,” economic affairs secretary Shaktikanta Das told TOI in an interview on Monday.

Das said the government is providing Rs 20,000 crore from the budget and it would target another Rs 20,000 crore to be brought in at the earliest. Discussions are on with several overseas funds such as those in Singapore, Abu Dhabi and Qatar. Russian Direct Investment Fund and Rusnano have held talks with government.

The NIIF, announced in the budget, is set to be registered with Sebi and the final clearances are expected by Tuesday, an official at the market regulator said.

The fund is expected to ease pressure on banks, which are facing severe stress from bad loans. Banks also have to deal with asset-liability mismatches, given that most of their deposits are for onetwo years, while lending for road and power projects typically is for 20 years or more. The government is banking on the fund to kick-start the infrastructure sector and help script a strong economic recovery. The hunt is on for a CEO at a market-linked salary and India Infrastructure Finance Company has already been designated as the interim investment advisor to vet projects. “We want to get the best person to head the fund and we are seeking talent globally although it has to be an Indian citizen,” Das said.

The economic affairs secretary also said that the government was reworking the gold bond scheme, which had attracted good investor interest, as well as the gold monetisation scheme, where the response was tepid. “We are tweaking certain aspects of the gold bond scheme to make it more market-friendly. For the gold monetisation scheme to be a success the real challenge is to deal with the consumer mindset,” Das said, adding that an awareness-cum-advertisement campaign was being launched.

Based on the initial feedback, the government is looking to rope in some of the 13,000 Bureau of Indian Standards-accredited jewellers as collection and quality agents, which will be the interface with those looking to park yellow metal and earn some interest. In addition, the government is also looking to allow banks to enter bipartite tie-up with melting centres to get more people to deposit gold so that it can be recycled and imports are reduced.