Targeting a faster industrial and economic growth, the government on Thursday announced a major package for development of infrastructure, including setting up of a Rs 40,000 crore (Rs 400 billion) corpus for project financing and host of sectoral incentives.

Finance Minister P Chidambaram in his Union Budget for 2004-05 provided a big boost to infrastructure projects through higher allocations and innovative financial arrangements.

Noting the success of inter-institutional group in bringing several power projects to financial closure, the Finance Minister announced the setting up of an IIG consisting of IDBI, IDFC, ICICI Bank, State Bank of India, Life Insurance Corporation, Bank of Baroda and Punjab National Bank to ensure speedy conclusion of loan agreements and implementation of infrastructure projects, particularly in airports, seaports and tourism sectors.

The seven bank and financial institutions will pool their resources on a callable basis and a sum of Rs 40,000 crore would be made available as and when necessary.