The Development Financial Institutions (DFIs) are some development subsidiaries or banks which are usually placed to support private sector development in the country. Presently, under the authorization of the Finance Ministry of India, the Department of Financial Services has invited the citizens of India to suggest a name, a tagline, and a logo for the new DFI. It should be like a visual signature, which is simple to remember and pronounce. Each of the three related characters should stand out individually but should represent a common approach. The last date for the entries is till 15 August 2021 and the winner of this contest will have a cash prize of up to Rs 5 lakh in each category.
The founding of the new DFI was announced by the finance minister in Budget 2021-22. In March, the Indian Parliament passed the National Bank for Financing Infrastructure and Development Bill (NaBFD). This new government-owned Development Financial Institution (DFI) will be operating to facilitate the flow of long-term reserves for some infrastructure projects. It further includes the issuance of guarantees and facilitating the development of a bond and derivative market.
The government is inviting citizens to name its DFI for prices up to five lakhs. The winning entry in the competition will be given cash prizes for each category, which is the first second, and third prize, each for name, tagline, and logo. The cash prize for each category will be like below.
- Name:
1st prize – Rs 5,00,000
2nd Prize - Rs 3,00,000
3rd Prize – Rs 2,00,000 - Tagline:
1st - Rs 5,00,000
2nd - Rs 3,00,000,
3rd - Rs 2,00,000 - Logo:
1st - Rs 5,00,000,
2nd - Rs 3,00,000
3rd - Rs 2,00,000
The participants are not mandated to present all three categories and may submit one of these. But the suggested names should be original and should not violate any provision of the Indian Copyright Act, 1957. Citizens can register themselves for this contest on www.mygov.in
The central purpose of this contest is to find a name, tagline, and logo of the new Development Financial Institution. This DFI is significant because it is supposed to give extensive financing for infrastructure. These infrastructure plans are often complicated, capital-intensive, and have a long maturity duration that continually poses threat to investors. And the varying scales and complexities of infrastructure schemes make financing more challenging. There are challenges in bank-led financing of infrastructure, and their liability profile is not filled for financing long-term high-risk infrastructure projects.
DFI is considered significant for infrastructure in India. The DFI will not simply be a provider of credit and credit plus co-operations but it will be an enabler and an incentive for a unique ecosystem for infrastructure, based on collaboration and partnership. This DFI will additionally work as a development bank with reliability and a charge through clear government support. The Indian government had already set up some extremely successful DFIs in the past. They involve the DFIs like Industrial Finance Corporation India (IFCI) in 1948 and Industrial Development Bank of India (IDBI) in 1964. India had consequently set up functional DFIs to seek medium or long-term sector-specific credit courses.
According to the Government of India, infrastructure is quite fundamental to build a new India. And it would mean distinct projects, extending existing infrastructure, and recognizing old infrastructure. The National Infrastructure Pipeline (NIP) of Rs 111 lakh crore was a credit of this need and hence over 7000 projects were classified under it. And the recently proposed DFI is expected to provide Rs 3 lakh crore towards infrastructure financing. The new DFI is about 3% of the 111-lakh crore expected to be invested on over 7000 projects as part of the National Infrastructure Pipeline till 2024-25. Yet, the execution and conclusion of those projects will require appropriate finance and the demand for funds is quite extensive.
Earlier, the ministry had adopted a very similar method for determining the name for the financial inclusion program of the government with Pradhan Mantri Jan Dhan Yojana 2014. And presently the government has practiced this idea once again. The Government of India will have full ownership of the new DFI, and it will bring down its stake to 26% over the next few years, it is considered to be a decisive move by the government. The DFI could additionally serve as a force to direct the ailments in the bond market. It will also facilitate greater private sector players who will be prepared to invest along with the DFIs to secure greater infrastructure investments in India.
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Reference:
- www.mygov.in
- www.aninews.in