Indian government has said that the Infrastructure Debt Fund (IDF), which was proposed by Finance Minister, Pranab Mukherjee, in Budget 2011-12 could be set up either as a company or trust. The IDF has been created to raise long-term resources for funding the infrastructure sector. The government has revealed that the requirement of funds for infrastructure in the 12th Plan has been estimated at USD one trillion.

Pranab Mukherjee said, “An IDF may be set up either as a trust or company, a trust based IDF (Mutual Fund) would be regulated by SEBI; an IDF set up as a company (NBFC) would be regulated by RBI”.

The IDF is aimed at increasing the flow of long term debt for funding the infrastructure development in the country. The IDF would work on gathering resources from domestic and off-shore institutional investors, especially insurance and pension funds.

The government has revealed that the IDF could be set up by NBFCs or banks, with a minimum capital of Rs 150 crore. The set up would help in raising resources through rupee or dollar denominated bonds of minimum five year maturity. These bonds could be traded among the domestic and foreign investors.