In a decisive move to bolster infrastructure development, Union Finance Minister Nirmala Sitharaman announced an outlay of Rs 1.5 lakh crore in 50-year interest-free loans to states, aiming to catalyze capital expenditure and strengthen core infrastructure across the nation. This announcement, part of the Union Budget presentation, underscores the government's sustained commitment to driving economic growth through robust public investment.
"The government will set up an Urban Challenge Fund of Rs 1 lakh crore to implement proposals to make cities growth hubs," Sitharaman declared during her Budget speech, signaling a strategic push towards urban transformation. This fund is expected to stimulate competitive urban projects, encouraging states to innovate and optimize their development models.
Continuing the momentum from previous years, the Modi 3.0 government reaffirmed its infrastructure-centric growth strategy with an emphasis on Public-Private Partnership (PPP) projects and asset monetization. Sitharaman detailed that each infrastructure-related ministry will introduce a three-year pipeline of PPP infrastructure projects, fostering a more structured approach to development and investment.
Further strengthening this framework, the Finance Minister announced the launch of the Second Asset Monetization Plan for 2025-30, targeting the mobilization of Rs 10 lakh crore. The capital generated through this initiative will be reinvested in new projects, ensuring a continuous cycle of growth and infrastructure enhancement.
In terms of project financing, the government will fund up to 25% of bankable projects, with the remaining 50% expected to be supported through bonds, banking institutions, and PPP models. This diversified funding strategy aims to balance fiscal prudence with aggressive developmental goals.
Highlighting social infrastructure, Sitharaman shared progress under the Jal Jeevan Mission, stating, "Under the Jal Jeevan Mission, 15 crore households, representing 80 per cent of India's rural population, have been provided access to potable tap water connection." To build on this achievement, she announced the extension of the mission until 2028 with an enhanced total outlay, aiming for 100% rural tap water coverage.