PFRDA plans direct pension fund investment in big infrastructure projects
The PFRDA is developing a framework to allow pension funds to invest directly in large-scale infrastructure projects to provide long-term capital. This shift aims to move beyond current investment vehicles like REITs and AIFs to support national infrastructure growth.
Why it matters
Direct pension fund investment could provide a massive, stable source of funding for India's infrastructure development, mirroring successful models in countries like Canada.
NEW DELHI: The Pension Fund Regulatory and Development Authority (PFRDA) is preparing a roadmap to allow entities regulated by it to invest directly in large infrastructure projects, beyond the current mechanism of investing through ReITS, InVITS and alternate investment funds (AIFs), chairman S Raman told TOI."A committee has been set up to look at the issue, and internal discussions are under way to evolve a mechanism where PFRDA can invest directly in such projects. It will be long, patient capital and may be possible at least five years down the line," said Raman on the sidelines of an event on NPS Diwas.Globally, Canadian pension funds are known to invest directly in big infra projects, including in India, and they hold a significant stake in such projects, including through equity.
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