India’s public capital expenditure has seen a significant rise, soaring from Rs 2 lakh crore in FY15 to a Budget Estimate of Rs 12.2 lakh crore by FY27. The government, in the Union Budget 2026-27, unveiled new initiatives like the Infrastructure Risk Guarantee Fund and City Economic Regions to boost infrastructure-led growth. Institutions such as the National Investment and Infrastructure Fund (NIIF) and the National Bank for Financing Infrastructure and Development (NaBFID) have played a crucial role in mobilizing substantial global and domestic capital, enhancing governance and ensuring long-term financing flows.
To tackle challenges in early-stage project construction and development risks, as well as delays and execution uncertainties, the government has introduced the Infrastructure Risk Guarantee Fund. This fund aims to offer partial guarantees to lenders, thereby reducing default risks for private developers and enhancing the security of financing.
Moreover, to harness the potential of urban centers, the Union Budget 2026-27 has introduced the concept of City Economic Regions (CERs) and proposed an allocation of Rs 5,000 crore per CER over a span of five years. Asset monetization through Infrastructure Investment Trusts (InvITs) and Real Estate Investment Trusts (REITs) has unlocked over Rs 1.5 lakh crore, enabling the recycling of funds into new projects and attracting global investors.
Over the past decade, India has consistently emphasized significant investments in infrastructure to drive inclusive progress and competitiveness. The World Bank has recognized India among the top five low and middle-income economies for job creation in the infrastructure sector, highlighting its commitment to development.
The National Investment and Infrastructure Fund (NIIF) manages assets worth $4.9 billion and establishes scalable platforms in transportation, energy, and digital infrastructure, either independently or in collaboration with experienced operators. On the other hand, the National Bank for Financing Infrastructure and Development (NaBFID) addresses gaps in long-term non-recourse finance, promotes the development of bond and derivatives markets, and fosters sustainable economic growth. By December 2025, the bank had sanctioned approximately Rs 3.03 lakh crore and disbursed around Rs 1.09 lakh crore to core infrastructure and social sectors.
The Union Budget 2026-27 has also announced the establishment of dedicated Real Estate Investment Trusts (REITs) for Central Public Sector Enterprises (CPSEs) to expedite the monetization of government-owned real estate assets.
