[Answered] Highlight the significance of the newly established Infrastructure Finance Secretariat (IFS).

The Department of Economic Affairs (DEA) in the Ministry of Finance had two divisions (the Infrastructure Policy and Planning Division, and the Infrastructure Support and Development Division) overseeing policy matters relating to the infrastructure sector. These two divisions are now being moved to a new set-up called the Infrastructure Finance Secretariat (IFS). The IFS will have three sections: Infrastructure financing, Sectoral studies and Capacity building.

Significance of Infrastructure Finance Secretariat (IFS):

• It is imperative in reworking the existing PPP policy and bringing it in tune with the Central government’s infrastructure push.
• It will also work on various infra-financing issues like deepening municipal bond markets, real estate and infrastructure investment trusts (REITs and InvITs).
• It would also deal with asset monetisation, dispute resolution and other myriad subjects.
• The two divisions- Infrastructure Policy and Planning and Infrastructure Support and Development — have taken infrastructure consultants from Asian Development Bank, World Bank, and KMPG. These experts will help enhance the capacity of IFS.
• ‘Infrastructure Financing’ section deals with REITS, INVITs and ways to enhance financing of projects and municipal bond markets. It works with various infrastructure ministries on their monetisation plans.
• The Sectoral Studies section looks at various issues in sectors like roads, Railways, power, telecom, airports and shipping. It is also working on new dispute resolution solutions.
• The Capacity Building section is tasked with carrying out training of state and central government officials as well as private sector participants on how to push project financing.

In terms of the potential to attract global investment, India is in a sweet spot when compared to other emerging economies. The newly established Infrastructure Finance Secretariat is a step in the right direction. It is imperative to iron out structural issues and to develop frameworks that allow transparent and flexible risk sharing mechanisms to attract investments in the infrastructure sector.