By IANS,
New Delhi : With India’s foreign exchange reserves topping $300 billion, the government and the Reserve Bank of India (RBI) have jointly decided to invest $5 billion in their wholly-owned subsidiary – India Infrastructure Finance Ltd.
The London branch of the off-shore fund, launched last month by Finance Minister P. Chidambaram, will lend to Indian companies implementing infrastructure projects in India. These projects are estimated to require a whopping $500 billion over the next few years.
Giving this information to the Rajya Sabha, the upper house of parliament, Minister of State for Finance Pawan Kumar Bansal said the idea was to use a part of India’s foreign exchange reserves for infrastructure financing without the risk of monetary expansion.
As of March 28, India’s foreign exchange reserves were $309.16 billion, he added.
Since its creation in January 2006, the fund has approved 78 infrastructure projects with a loan commitment of over $4.25 billion. These projects involve an aggregate project cost of over $32 billion.