Gujarat Workshop Highlights Solutions for India’s Infrastructure Funding Gaps
A workshop on “InvITs, REITs, and Municipal Debt Securities as Alternative Financing Mechanisms for Infrastructure Development” was recently organized in Gandhinagar. The event, held by The Industries and Mines Department of the Gujarat government, in collaboration with the Gujarat Infrastructure Development Board and SEBI, brought together policymakers, financial experts, and industry stakeholders to address funding gaps in India’s infrastructure sector.
During the workshop, panelists discussed the significant role of alternative financial sources like Infrastructure Investment Trusts (InvITs), Real Estate Investment Trusts (REITs), and Municipal Debt Securities in unlocking private capital for infrastructure projects. These mechanisms play a vital role in promoting economic growth, enhancing sustainability in urban development, and ensuring long-term, stable returns for investors.
Ashwani Bhatia, a full-time member of SEBI, highlighted the remarkable growth of capital markets and the opportunities they present for the infrastructure sector. The panelists agreed that InvITs are a robust mechanism for attracting private capital into infrastructure projects. They emphasized the value of InvITs in enabling infrastructure developers to realize the full potential of their assets while offering stable returns for investors.
InvITs and REITs typically offer predictable yields ranging between 7% and 9% annually, making them an attractive option for lenders seeking steady returns. REITs allow investors to pool funds for investments in commercial real estate, making them ideal for financing large-scale urban development projects. Municipal debt securities were also recognized as a game-changer for cities and local governments seeking to fund critical infrastructure projects.
In conclusion, experts highlighted the importance of municipalities strengthening their creditworthiness and ensuring financial transparency to attract a wider range of investors. For Gujarat, these alternative financing mechanisms are not just tools, but enablers of transformation in infrastructure development.
