After the relaxation in the external borrowing window, infrastructure companies will soon have access to various other forms of funding.

For, the government is all set to put in place a mechanism, which will allow banks to raise long-tenor gold deposits that can be used to finance infra projects.

The government has also decided to allow private equity companies and venture capital funds to bid for the infrastructure projects. It is also pushing ahead with many of the remaining recommendations of the Deepak Parekh committee on infrastructure financing, which submitted its report in May 2007.

Officials familiar with the subject told FE that barring tax-related proposals of the panel, the finance ministry was going ahead on most other suggestions. The idea about gold is to allow its conversion from a physical asset into a financial asset available for intermediations.

At present, gold in India is bought largely as household investment?either to meet future needs or purely as a long-term investment. The savings in gold

take the form of physical savings not available for intermediation by the financial sector.

To convert these physical savings into financial savings, households need to be encouraged to hold their gold exposure in a form which does away with the need for physical holding of gold. One such product could be fixed tenor long-term gold deposit certificates issued by banks.

Banks, in turn, could hedge the risk of such gold liabilities in the forward or futures market and, thereby, generating financial liabilities for themselves. Such long-tenured liabilities could then be used for financing infrastructure projects, the Parekh panel had suggested.

The government is also in favour of making available the domestic pension and provident fund money to the infrastructure sector, while it has agreed to give insurance companies more leeway in financing infra projects.

Further, norms are also being tweaked to enable private equity companies and venture funds bid for infra projects in India.

Currently, Sebi registered venture funds/private equity funds cannot be taken as bidding partners, as these funds do not meet conventional qualification criteria such as gross revenue, net worth or net cash accruals.

The Parekh panel has suggested that to facilitate the participation of PE firms, the criteria to qualify as bidding partners should be not the net worth of the private equity or venture investment manager, but the uncommitted investible funds managed by these entities and available for deployment. India requires nearly $475 billion funds to invest in infrastructure projects in sectors such as roads, ports, rail and power during the 11th Five-Year Plan period, the Parekh committee had estimated.