India May Draw SWFs to Invest in Infrastructure Bonds

sunsetApparently, the government of India may permit a direct line of investment for sovereign wealth funds to invest in in tax-free infrastructure bonds. Sovereign funds have expressed interest in India and desire allocating to investments that provide substantial yield. Several large state-owned institutions have had infrastructure bond-issuances in which cash has yet to be spent. Bonded by red tape, many large-scale infrastructure projects are clogged up, preventing further cash disbursements. The Indian finance ministry reprimanded several projects for leaving bond-issued funds sitting in bank deposits.

India’s current account deficit is peaking. The Indian government wants to prevent the rupee from sliding further and augmenting foreign exchange reserves. With signals of possible slowing of quantitative easing from the United States and other developed economies, emerging markets are in semi-panic mode.

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