Financing For Projects And Infrastructure: RBI's New Directions Triggers Big Push For Infrastructure Development In India

Introduction

The Government of India in recent years has increased public spending on infrastructure capacity development, with India's ambitious developmental targets in mind. Capital expenditure by the Government of India on major infrastructure sectors such as atomic energy, civil aviation, telecommunications, renewable energy, power, road, rural development, ports, housing, urban affairs and railways has therefore increased at a steady rate of 38.8 percent from 2020 to 2024¹. However, India's entire infrastructure capacity deficit cannot be met solely through public expenditure as it would lead to widening of the fiscal deficit which is presently in the range of 4.5-4.8 percent. Therefore, access to private investment and easy availability of debt and capital for financing of infrastructure and housing projects remain a critical need of the hour, to meet the Government's vision of "Vikshit Bharat@2047", and of India being a US$ 30 trillion economy and a