Economic Survey 2025-26: Need to improve India’s PPP frameworks

Public–Private Partnership (PPP) frameworks in India need to move from transaction-centric execution toward system-level market building, with a sharper focus on reducing structural uncertainty, the Economic Survey 2025-26 has said.

Noting that wider understanding is needed for what should be categorised as infrastructure, the survey noted the concept is evolving beyond physical networks to encompass digital public infrastructure, clean energy systems, resilient water management and future-ready technologies.

“While PPP frameworks have matured at the central level and in select sectors, challenges persist at the sub-national level,” the survey noted adding the distinction between PPPs and Engineering Procurement and Construction (EPC) contracts—namely that PPPs are partnerships rather than vendor arrangements—is not always fully understood.


According to the Survey tabled in parliament Thursday, trust deficits and a limited understanding of risk–reward principles continue to constrain the uptake of PPPs in several states and urban local bodies.

“These challenges are compounded by uneven institutional capacity, even as states and cities account for a rising share of infrastructure demand,” the survey said noting the next reform frontier lies in professionalising PPP cells, adopting programmatic approaches instead of project-by-project experimentation, and leveraging data platforms to track performance, renegotiation, and lifecycle outcomes.

Highlighting how public perception, an often-overlooked aspect related to PPP, is also crucial, the survey noted that they are sometimes perceived as ‘selling of assets’ rather than long-term service partnerships, particularly at the state level.

“Improving communication and transparency is therefore important for sustaining public acceptance and investor confidence, especially for projects with long concession periods,” the survey said, adding the perception principle has improved by a long margin among central projects as compared with States.

“The lesson is often lost that wrong signalling in this regard creates two problems – adversely affecting the public mood and driving away investors willing to stomach the entirety of risks across a long concession period (30-60 years),” the survey noted.


This year’s survey also highlighted how India’s widened infrastructure base is enhancing productivity, competitiveness, innovation and sustainability across the economy.

“Looking ahead, maintaining investment momentum, deepening private participation and aligning infrastructure development with emerging priorities—such as decarbonisation, digitalisation and resilience—will be critical,” the survey said adding these efforts position infrastructure as a central pillar of India’s medium-term growth strategy and a key enabler of its long-term development vision under Viksit Bharat @2047.

The Survey noted that coordinated investments across roads, railways, ports, civil aviation, energy, digital and rural infrastructure have begun to yield tangible efficiency gains—shorter travel times, faster freight movement, improved logistics performance and wider access to essential services.

These improvements in transport connectivity are enhancing ease of travel for people and businesses by reducing travel times, lowering transaction costs and expanding access to markets.

“Enhanced multimodal integration and more reliable freight movements are strengthening regional integration and improving the competitiveness of the Indian economy by enabling firms to participate more effectively in domestic and global value chains,” the survey said.