After duty cuts for the industry and the middle class, the government on Friday shifted focus to infrastructure development deciding to provide Rs 50,000 crore (Rs 500 billion) at concessional interest rates to fund core sector projects.

Credit for both term loans and working capital to projects in power generation, sea ports, airports, roads, tourism, telecommunication and urban infrastructure will be provided at 200 basis points (2 percentage points) below the prime lending rate, Finance Minister Jaswant Singh said announcing the second lot of sops in the run-up to a possible early Lok Sabha polls.

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"A consortium of banks and financial institutions, under lead institutions, will appraise major projects, and after ascertaining their economic viability, ensure that credit for both term loans and working capital is provided speedily at higher competitive rates of interest," he said.

A consortium of IDBI, IDFC, LIC, ICICI Bank and SBI has been designated for policy, procedural and financial closure of investments of Rs 50,000 crore (Rs 500 billion) over the next three years.

Singh said the Industrial Development Bank of India will be converted into a bank and its functioning reoriented for focus on development financing.

Similarly, the IFCI will be restructured through transfer of its impaired assets to an asset reconstruction company and its merger into another large public sector bank.

A voluntary retirement scheme has already been implemented to facilitate its restructuring.

"For both these, the target date of completion is April 1, 2004," Singh said.