In a big boost for India's trilliondollar infrastructure development ambitions, the country's largest pension fund — the Employees' Provident Fund Organisation — is finally ready to route some of its $100 billion corpus into the cash-strapped sector through Infrastructure Debt Funds or IDFs.

Such long-term savings would be crucial for building new infrastructure that faces severe funding constraints, with banks and developers having little room to deploy fresh funds into longgestation projects that are hampered by red tape.

IDF is the government's big idea to provide long-term funds to infrastructure projects, and the finance ministry has been trying to route insurance and pension savings into these funds as they can be an important source of stable and, more importantly, domestic money.

Since late 2012, the ministry has been pursuing the idea with the insurance regulator IRDA and the labour ministry, which oversees the retirement savings of over 6 crore formal sector workers parked with the provident fund office.

The provident fund department, also known as EPFO, is now veering around to the finance ministry's point of view.