Finance Minister draws up plans to encourage PPP for infrastructure building

Renewing the push for private participation in large infrastructure projects, finance minister Nirmala Sitharaman announced a road map for the same in the Budget 2025-26. The Finance Minister said each infrastructure-related ministry will come up with a 3-year pipeline of projects that can be implemented in public private partnership mode. States will also be encouraged to do so and can seek support from the IIPDF (India Infrastructure Project Development Fund) scheme to prepare PPP proposals, she added.

Government capital expenditure target for the fiscal 2025-26 has been kept flat at Rs 11.2 lakh crore.

Sitharaman said the Government will also set up an Urban Challenge Fund of Rs 1 lakh crore to implement the proposals for ‘Cities as Growth Hubs’. “This fund will finance up to 25 per cent of the cost of bankable projects with a stipulation that at least 50 per cent of the cost is funded from bonds, bank loans, and PPPs,” she said while adding an allocation of Rs 10,000 crore is proposed for 2025-26.


For furthering PPPs and assisting the private sector in project planning, access to relevant data and maps from the PM Gati Shakti portal will be provided. The National Bank for Financing Infrastructure and Development (NaBFID) will also set up a ‘Partial Credit Enhancement Facility’ for corporate bonds for infrastructure, she added.

Commenting on the budget announcements, Kushal Kumar Singh, Partner at Deloitte India said these provide a long-term view to the private sector on the opportunities that may be available in India.