Govt to ask every infrastructure ministry to come up with a list of projects to be awarded under the PPP model

Infrastructure ministries will come up with 3 year pipeline for PPP projects

The central government on February 1 announced that all infrastructure ministries in India will come up with a list of projects that can be developed under the Public-Private Partnership (PPP) model in the next three years.

"Infrastructure ministries will come up with 3 year pipeline for PPP projects," Sithraman said as part of her Budget speech for the financial year 2025-26.

She added that the government will also launch a new asset monetisation plan for 2025-30.

Infrastructure sectors include atomic energy, civil aviation, telecommunications, renewable energy, power, road, rural development, ports, housing & urban affairs and railways.

Kushal Kumar Singh, Partner,Deloitte India told Moneycontrol that the budget provides greater emphasis of Public Private Partnerships in the infrastructure industry in India.

"The announcement of preparation of second National Monetization Pipeline with a target plowback of Rs 10 lakh Crores, and preparation of 3 year PPP pipelines by ministries / departments in Infrastructure sectors some of the announcements made by the Finance Minister. These provide a long term view to the private sector on the opportunities that may be available in India and enables them to plan their strategy accordingly," Singh said.

The government's decision allow National Bank for Agriculture and Rural Development (NAFBID) to provide partial credit enhancement facility in infrastructure sector will help in making projects bankable and help in reducing borrowing, Singh added.

"The announcement of a Urban Challenge Fund with a allocation of Rs 10,000 crores for 2025-26 proposing funding of 25% of the project cost provided 50% of the cost is funded by loans/bonds/ PPPs will provide an impetus on better project structuring for making urban projects commercial viable," he added.

The government had introduced the National Infrastructure Pipeline (NIP) in 2019, NIP has a projected investment of around Rs 111 trillion for FY20-25 for developing a comprehensive view of infrastructure development in the country.

At the time of its launch, NIP consisted of 6,835 projects. It has now expanded to over 9,000 projects across 35 sub-sectors and covers economic and social infrastructure projects jointly funded by the Centre, states, and the private sector.