Finmin to hold meeting with heads of financial institutions on infra funding on Thursday

New Delhi, Sep 9 (PTI) The Finance Ministry is scheduled to hold a meeting with heads of financial institutions, including some large banks, to discuss issues related to infrastructure funding on September 11.

The meeting is to be chaired by Financial Services Secretary M Nagaraju, sources said.

The meeting is expected to discuss credit availability to the infrastructure sector in view of the government's thrust on public capex.

Finance Minister Nirmala Sitharaman earmarked a Rs 11.21 lakh crore capital expenditure (capex) target for the current financial year.

While the FY25 budget allocated Rs 11.1 lakh crore for capex, revised estimates project spending of only Rs 10.18 lakh crore, a shortfall of approximately Rs 93,000 crore.

The latest Economic Survey has emphasised that investment in the infrastructure sector needs to be continuously scaled up over the next two decades to sustain a high growth rate, while the government needs to come up with ways to increase private sector financing and tap new avenues to mobilise resources.

"India needs a continued step-up of infrastructure investment over the next two decades to sustain a high rate of growth," said the Economic Survey 2024-25 tabled in Parliament.

Earlier this year, the Reserve Bank issued the final directions on project finance, asking lenders to maintain a general provision of 1.25 per cent, as against the 5 per cent proposed in the draft norms, on commercial real estate, and 1 per cent each on commercial real estate-residential housing and other portfolios during the construction phase, providing relief to banks.

The new relaxed norms will come into force from October 1.

Under the new norms, banks shall have to maintain 1 per cent general provision on commercial real estate projects during the operational phase after commencement of repayment of interest and principal, 0.75 per cent on residential housing, and 0.40 per cent on all other projects. PTI DP DP SHW