The National Bank for Financing Infrastructure and Development (NBFID) Bill, 2021 seeks to create a development finance institution (DFI). In light of this, discuss the challenges DFI face in India. 10 marks

Mentor’s comment-

  • In the intro, mention the Budget announcement of the finance minister about the creation of DFI to finance the infrastructure.
  • In the body, mention the past experience in India about the DFI in which interference from the executive results in the financing of the unviable project, this results in governance issues which ultimately affects the institutions finance raising ability despite the governments backing.
  • Conclude by mentioning the need to take into account these factors while India creates financing institutions.
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