The Insurance Regulatory and Development Authority (IRDA), in a new move, has agreed to allow lending by insurance firms to the Infra fund proposed by the Planning Commission.
At a Parliamentary committee meeting, finance minister, Pranab Mukherjee informed that there could be a close to a 30% gap in the funds required for the infrastructure sector, a part of which should be filled by funds from the Insurance sector. The suggestion is to create multiple funds.
Infrastructure companies will have to subscribe to bonds issued by the infra fund to avail debt. In return, the insurance company will get good returns as it will be for the long term. This move will help pump in a huge pool of money and give a much-needed boost to the infrastructure sector.
