NEW DELHI, March 25: Parliament today passed a Bill to set up the National Bank for Financing Infrastructure and Development (NaBFID) to fund infrastructure projects in the country, with Finance Minister Nirmala Sitharaman asserting that its audited accounts will be placed before both the Houses every year and they will have “oversight” of the institution.
Rajya Sabha passed the National Bank for Financing Infrastructure and Development (NaBFID) Bill, 2021 by voice vote today. The Bill was passed in Lok Sabha on Tuesday.
Participating in a debate on the Bill, some members raised the issue of lack of parliamentary oversight of the institution and demanded that the proposed legislation be sent to a select committee for scrutiny.
Replying to the debate, Finance Minister Nirmala Sitharaman explained, “Every year audited accounts (of this bank) will come to each House of Parliament... so Parliament oversight (of the institution) is in-built in the Bill.”
Section 26 of the Bill provides, “The Institution shall furnish to the Central government and the Reserve Bank within four months from the date on which its accounts are closed and balanced, a copy of its balance-sheet and accounts together with a copy of the auditor’s report and a report on the working of the Institution during the relevant year, and the Central government shall, as soon as may be after they are received by it, cause the same to be laid before each House of Parliament.”
Thus, the development finance institution, called the National Bank for Financing Infrastructure and Development (NaBFID), will be answerable to Parliament.
The bank will support the development of long-term non-recourse infrastructure financing in India, including development of the bonds and derivatives markets necessary for infrastructure financing and to carry on the business of financing infrastructure.
Sitharaman explained that a five-year tax break is provided to private development finance institutions under the Bill to ensure enhanced flow of funds and, thereafter, they should be smart enough to become competent.
“The Act (Bill) gives space to private institutions to come up for which we give tax benefits for first five years and for this institution (NaBFID), we are giving tax benefits for 10 years,” she told the House.
She further told the House, “We have provided an authorised capital of Rs 10-lakh crore. Rs 20,000 crore has been given as equity and Rs 5,000 crore has been given as grant.” – PTI