₹20,000-Crore Risk Guarantee Fund on Cards to Attract Private Infra Investment

The government is examining the option of creating a risk guarantee fund of ₹20,000 crore to encourage private sector investment in the infrastructure sector. According to Jagran sources, the creation of a risk guarantee fund for the infrastructure sector is expected to ensure private sector investment by sharing the project risks and reducing the project developers' burden.

An official said that this fund, with an initial corpus of ₹20,000 crore, could be managed by the National Credit Guarantee Trustee Company Limited (NCGTC). This fund will bear the development risks of any new project. Additionally, additional safeguards such as a minimum equity stake must be provided by the developer, and risk-based premiums may be charged.

Jagran sources stated that this fund will offset losses arising from policy uncertainty and other non-commercial risks, encouraging lenders to extend larger loans for large projects. According to the National Infrastructure Pipeline (NIP) report, India is estimated to need to spend $4.5 trillion (approximately Rs. 390 lakh crore) on infrastructure by 2030 to achieve the target of a $5 trillion economy by 2025 and sustain the growth momentum until 2030.

The report indicated that India's desire to sustain a relatively fast rate of growth is contingent upon the infrastructure sector. Nevertheless, India is plagued by poor infrastructure, which cannot keep pace with the requirements of an expanding economy as well as with the needs of an expanding population.