The Centre feels an investor wants to make a safe investment in these times and he is finding it risky to invest in industry and trade.
With investor confidence in place, the government is hopeful in bringing low-cost capital to the sector. This will come once the requisite approvals from the finance ministry
and the Reserve Bank of India (RBI) are in place. Investors also want to shift reserves from the real estate sector, which are currently shrouded under the shadow of uncertainty.
The Centre has already granted approval to private firms to come out with their Infrastructure Investment Trusts (InvITs). There are three-four companies which have already started tapping that source.
Like InvIT, which is one of the models for investment in the sector, there are many more models that also have the potential. They are toll-operate-transfer (TOT), build-operate-transfer (BOT), engineering-procurement-construction (EPC) and hybrid-annuity (HAM).
“Our effort is to bring foreign direct investment (FDI) through these routes also. Depending on the economic viability, we will tap these models from time to time,”said the official.
InvIT is like a mutual fund, which enables direct investment from an individual or an institutional investor in infrastructure projects to earn a portion of the income as returns.