To deal with the challenges faced in the financing, the Budget 2021-22 proposed the Development Finance Institution (DFI). How would DFI address the problem of financing? What are the concerns with allowing FPI in DFI? 10 marks

Mentor’s comment-
  • https://www.thehindu.com/opinion/op-ed/despite-some-hits-the-budget-has-crucial-misses/article33721377.ece
  • In the intro, briefly describe the idea of DFI.
  • In the body, mention the reasons for lack of funding to the infrastructure projects like long gestation period and the issue of maturity mismatch faced by the bank, low return on investment etc. In the next part, mention how the DFI would address the problem of financing for the infrastructure project. In the concerns mention the short term inflows of FPI and the exchange rate risk.
  • Conclude by mentioning the need to find domestic financing mechanism instead of FPI.
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3 years ago

Order Id:#0000380210

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3 years ago

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