The government will provide a five-year income tax holiday to private sector development finance institutions (DFIs) to build a robust system for funding infrastructure. They will join a state-owned DFI that’s being set up.
The government will move an amendment to the income tax act to provide for the tax holiday when the Finance Bill is taken up for passage in Parliament, a senior government official told ET.
The cabinet on Tuesday approved the National Bank for Financing Infrastructure and Development (NaBFID) — the state-run DFI proposed in the budget — and a bill for the creation of government-owned as well as private DFIs. The DFI bill will soon be introduced in Parliament
State-owned NaBFID will enjoy a 10-year income tax holiday and receive a Rs 5,000 crore grant in lieu of tax-free bonds to neutralise the higher cost of funds, finance minister Nirmala Sitharaman had said.
Certain asset transfers to DFIs will also get stamp duty relief, the official said.
RBI will regulate DFIs and formulate rules for them. DFIs set up in the private space in the 1990s were converted into scheduled commercial banks as they struggled with the challenges of the long-term infrastructure financing.
The government is keen to ensure that DFIs succeed this time around, given the need for such funding, by putting in place a facilitative framework. DFI will also support credit enhancement mechanisms, provide project development and monitoring, and help develop the bond market, thereby nurturing the overall infrastructure financing ecosystem. The National Infrastructure Pipeline has pegged the funding requirement at over Rs 111 lakh crore till 2025.
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SINGAPORE: Singapore will invest S$25 billion – or 1 per cent of its gross domestic product (GDP) – in research, innovation and enterprise for the next five years.
The Research, Innovation and Enterprise 2025 Plan (RIE2025), announced by Finance Minister Heng Swee Keat at a press conference on Friday (Dec 11), includes a new national programme to prepare for future epidemics.
RIE2025 will expand research and development in four domains – manufacturing, trade and connectivity; human health and potential; urban solutions and sustainability; and Smart Nation and digital economy.
It will also support businesses in adopting science and technology, and expanding into adjacent areas with “high growth potential”. In addition, it will customise support according to different enterprise segments.
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RIE2025 is the third such five-year plan, which has seen its budget go up progressively over the years. It was S$19 billion for RIE2020, while S$16 billion was set aside for RIE2015.
Within the RIE2025 budget, 15 per cent will be set aside for “White Space”, said Mr Heng, which will give the RIE domains flexibility to reallocate their budgets.
“This will give us greater agility and nimbleness in responding to emerging priorities, new breakthroughs and changes in the global technological landscape.”
Nearly 30 per cent of the new budget, or S$7.3 billion, will be set aside for universities and A*STAR research institutes, 26 per cent to support increased R&D into its four domains and 9 per cent will be set aside for talent development.
HUMAN HEALTH AND POTENTIAL
As science and technology become “more pervasive”, there is a need to “refresh” the four RIE domains to “better drive economic growth post-COVID and address the broader spectrum of national needs”, said Mr Heng.
The Health and Biomedical Sciences domain will be expanded to include Human Potential, to tackle issues of an ageing population and low birth rate.
“We must continue to enable our people to enjoy good health and to realise their full potential,” he said, adding that the Government will invest more in preschools and research into improving prenatal and early childhood development.
For instance, Singapore’s largest birth cohort study, called Growing Up in Singapore Towards Healthy Outcomes (GUSTO), will be expanded to study the factors that influence adolescent growth and maturity.
The study has tracked participants since early pregnancy, continuing with both mothers and children, and insights from GUSTO have informed the review and implementation of new health policies in Singapore, including universal screening for gestational diabetes mellitus for all pregnant mothers across public healthcare institutions.
READ: Eliminating paper documents, S$300m research fund top-up among MCI’s 2019 plans
READ: A*STAR to reorganise research units for more ‘clarity’ on funding
Trade and Industry Minister Chan Chun Sing, Sustainability and the Environment Minister Grace Fu, Education Minister Lawrence Wong, and Communications and Information Minister S Iswaran were also at the announcement of RIE2025.
Mr Wong said the National Institute of Education will have a new Science of Learning in Education Centre (SoLEC) that will integrate research across different fields in child development curriculum, instruction learning sciences and sports science.
“It will provide an important bridge between cutting edge research that’s done in the universities in our research institutions and teaching practices in the classrooms.”
Investments will also be made in research projects related to the health and well-being of seniors.
In addition, the Government will develop a new National R&D Programme for Epidemic Preparedness and Response (PREPARE) to prepare for future pandemics, said Mr Wong.
URBAN SOLUTIONS AND SUSTAINABILITY
The Government seeks to better integrate urban solutions and sustainability, and pursue the latter in a “broader way”, said Mr Heng.
RIE2025 will make the built environment more efficient and sustainable by adopting robotics and automation and 3D concrete printing.
It will look into decarbonising Singapore’s power, industry and transport sectors by exploring low carbon technologies.
In addition, the Government is “taking climate change seriously”, he added. “We’re committed to reducing our carbon footprint, to fulfil our pledge made under the Paris accord and protect ourselves from rising sea levels.”
For example, it will conduct climate modelling to understand the impact of increased urban heat island effect and warming trends on health and food resilience, said Ms Fu.
It will strengthen food resilience and preserve Singapore’s biodiversity.
MANUFACTURING, TRADE AND CONNECTIVITY
As part of the Government’s boost for manufacturing, it is looking at the “next generation of transport solutions” that will strengthen Singapore’s air and maritime connectivity to the world, said Mr Chan.
“Over the last 12 months through COVID, we have seen how both natural causes like the pandemic have disrupted our supply chains. We have also seen how man-made factors like export restriction policies have compounded the disruption of our supply chains,” he said.
As such, the Government is looking into improving the resilience of Singapore’s supply chain, from food to intermediate industrial products.
SMART NATION AND DIGITAL ECONOMY
RIE2025 will accelerate the development, translation and adoption of “key technology areas” like AI, cybersecurity, trust technologies, communications and connectivity and quantum computing, said Mr Iswaran.
As it aims to develop “globally-relevant, leading digital solutions”, Singapore will need to do more to “strengthen the translation of research findings into tangible products and services”, he added.
This will include investments in communications technologies R&D, focusing on 5G and future communications technologies, and drive a nationwide AI model-building and adoption.
“Digital technologies are set to change the game in the next bound of economic development and through our RIE efforts, we will ensure that Singapore continues to be well-placed to seize the opportunities of the digital future.”