CII urges govt to establish IDSF to finance growth
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New Delhi: Industry lobby CII on Sunday urged the government to establish a professionally managed India Development and Strategic Fund to finance the country's long-term growth, resilience, and secure critical economic interests abroad.
India needs a twin-armed India Development and Strategic Fund (IDSF) to power growth and secure the country's strategic future, the Confederation of Indian Industry (CII) said.
Conceived as a national fund, IDSF would mobilise patient, long-horizon capital to build India's productive capacity at home and secure critical economic interests abroad, it added.
CII believes that with disciplined design and funding, IDSF could, over the next two decades, build a managed corpus in the range of $1.3 to 2.6 trillion by 2047, comparable in ambition and credibility to the world's leading sovereign investors.
The proposed capitalisation roadmap includes a modest initial budgetary allocation to establish credibility, followed by systematic channelling of a share of asset monetisation proceeds, from roads, transmission lines, ports, and spectrum, into the fund instead of one-time deficit reduction.
Over time, a portion of the government's equity in select public sector enterprises could be transferred to the fund, turning these enterprises into instruments for India's global expansion rather than mere disinvestment candidates, it suggested. In addition, the fund could issue thematic instruments, such as infrastructure, green and diaspora bonds to mobilise long-term domestic and international savings, while co-investing with multilateral and bilateral partners.
Once macroeconomic buffers are adequate, a calibrated allocation of a small portion of India's foreign exchange reserves could also be considered for overseas strategic acquisitions in areas like critical minerals and energy, CII stressed.
Chandrajit Banerjee, Director General, CII, said the time has come for India to build its own enduring financial engine for development.
"India is entering a decisive window of opportunity. We are already among the world's largest economies, but to reach developed-economy status by 2047, we need structural, perpetual sources of long-term capital that go beyond the annual budget cycle.
