In Union Budget 2021, it was announced that there is a plan to establish a development financial institution (DFI) which stands for infrastructure financing. In light of this effort, the Department of Financial Services, Ministry of Finance, is inviting citizens from across India to help build a name for the new entity. They are also asking citizens to come up with a tagline and design a logo for it. defi. Entries are expected to indicate the purpose, spirit and activities to be conducted by the Development Financial Institution. Entries will be taken as a contest where participants can win up to Rs 15 lakh.
What are the prize details for the DFI Competition?
Entries for submissions are open until August 15, 2021. These entries will be judged on several criteria such as creativity, liveliness, ability to engage with the subject. It should reflect the spirit of New India with all citizens engaging with the spirit of this initiative as well as stakeholders. This comes against the backdrop of the celebration of the elixir of freedom festival.
After closing the entries the winning entry will be awarded a cash prize of each of the three categories, which are name, tagline and logo design. Each category is also sub-divided into first, second and third place respectively. All the first place prizes for each category, be it name, logo or tagline, will get a cash prize of Rs 5 lakh. Similarly the cash prize for each category for the second position is Rs 3 lakh and for the third position the cash prize for each category is Rs 2 lakh.
The purpose behind development financial institution
This new innovative approach is a first in India as banks have always been the primary source of funding for infrastructure. Now, this development financial institution will be one of the only institutions fully committed and oriented towards financing infrastructure development in the country. It has been approved by the Parliament through the National Bank for Financing Infrastructure and Development Act, 2021. Infra will act as a development bank with the support of the government through the DeFi mandate.
DeFi also promises not to kick out other lenders or attempt to field them, but will instead crowd them, according to information on the MyGov website. It aims to undertake new projects, expand existing infrastructure and revive dilapidated infrastructure. That is why the government has allocated Rs 111 lakh crore for this initiative and has parallelly identified over 7,000 projects to be invested from 2024 to 2025 under the National Infrastructure Pipeline (NIP).
Being a promoter of credit towards infrastructure development, the unit will also act as a catalyst for a new ecosystem for infrastructure-based collaboration and partnership. The operations of the institute will be prioritized to make it more livable with risk mitigation, product innovation, access to green and ethical funding as well as helping in the growth of the bond market.
Considering that the Development Finance Institute is a fund for financial infrastructure projects at the national level and backed by the government, it may not meet commercial standards of return, as BloombergQuint reports. The report noted that most government-owned or supported agencies benefit from government guarantees.
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