The establishment of a mechanism for speedier implementation of PPP projects is also an indication along these lines as the Centre rationalises spends to ensure fiscal prudence.
To be sure, the FY26 capex goal is 0.9% higher than the budgetary estimate (BE) of 11.11 lakh crore earmarked for FY25. Since key infrastructure ministries were unable to meet these targets, the allocation was lowered to 10.18 lakh crore in the revised estimate (RE) for the current fiscal year.
Capex allocation for roads has been kept at 2.72 lakh crore for FY26, roughly the same as in FY25. For Indian Railways as well, the budgetary allocation for capex is little changed at 2.52 lakh crore.
“Although the government’s capital expenditure allocation has increased moderately, the emphasis is likely to shift towards effective implementation through the PPP model,” India Ratings & Research director Vishal Kotecha said on the change in approach.
This is evident from initiatives aimed at creating a three-year pipeline of projects, annual monetisation plan and access to PM Gati Shakti data, ensuring a steady stream of investments and timely execution. In her budget speech, finance minister Nirmala Sitharaman said each infrastructure-related ministry will come up with a three-year pipeline of projects that can be implemented in PPP mode. States will also be encouraged to do so and can seek support from the India Infrastructure Project Development Fund scheme to prepare PPP proposals, she added. Sitharaman said the government will also set up an Urban Challenge Fund of 1 lakh crore to implement proposals for “cities as growth hubs.”
“This fund will finance up to 25% of the cost of bankable projects with a stipulation that at least 50% of the cost is funded from bonds, bank loans and PPPs,” she said, adding an allocation of `10,000 crore is proposed for FY26.
Content Source: economictimes.indiatimes.com