Cabinet approved the proposal to invest 4.3 Billion $ in the World Bank Bonds
Union Cabinet approved a proposal to invest in the bonds of the World Bank Group. It also approved proposal to set two semiconductor manufacturing facilities.
The Union Cabinet of India on 12 September 2013 approved a proposal to invest 4.3 billion US dollar in the bonds of the World Bank Group. The investment has been planned to receive additional cheaper funding from the multilateral agency for infrastructure related projects.
• The RBI will make investments in the bonds that will be floated by the International Bank for Reconstruction and Development (IBRD). IBRD is the lending arm of World Bank.
• RBI will get returns on the investments made on the bonds. The tenure of the bonds would vary from time to time.
The decision was taken in the backdrop of the borrowing headroom of India, which was reaching its upper limit. The planned investments would bring in larger sums for infrastructure financing in the country.
During the same meet, an in-principle approval to the proposal of setting-up of two semiconductor manufacturing facilities was also given by the Union Cabinet.
• These manufacturing facilities would play a major role in controlling the import of electronic products like chipsets.
The Government would make an investment of about 25000 crore rupees and the government support level for development of these units will be decided following the negotiations with the chip makers.