The government of Prime Minister Narendra Modi has consistently eased India’s Foreign Direct Investment (FDI) regime since coming to power in 2014. This is representative of the role of private capital in spurring economic growth, creating employment, and democratising growth. In the Budget Speech for 2022-23, Finance Minister Nirmala Sitharaman, in a similar vein, stressed the importance of private capital in driving growth in the Indian economy. As the government strategically divests from publicly held companies, like the recently concluded deal with Air India, private capital will become increasingly more prominent in the share of India’s most successful enterprises.

Yet, public investments must lead the way in the virtuous cycle of investments that the FM highlighted as a goal for India under the Amrut Kal vision 2047. In her speech, the FM highlighted that the government will continue to take the lead in investment to provide support to private capital and maximise its potential. Therefore, capital expenditure for this fiscal year will increase by 35.4 per cent, from INR 5.54 lakh crore to INR 7.50 lakh crore. This will account for 2.9 per cent of GDP in 2022-23.

The government’s view of the inextricability of private and public capital in India’s growth was further displayed in the announcement of NIIF and SIDBI Fund of Funds, backed by the government, that will promote crucial sunrise sectors like climate action, deep-tech, digital economy, pharma and agri-tech. Through a blend of private and public, where the government share will be limited to 20 per cent, these funds will scale capital, have a multiplier effect, and promote thematic funds managed by private fund managers.

At the same time, to prioritise green growth, the government will issue sovereign bonds to raise capital for green investments. Capital thus raised will be deployed in public sector projects that will reduce the carbon intensity of the economy. Furthermore, the government will enhance the financial viability of infrastructure projects by encouraging development under the Public-Private Partnership (PPP) model and by providing technical and knowledge assistance from multi-lateral agencies. Global best practices, innovative financing, and balanced risk allocation will also serve to improve project viability.

These extensive measures take the National Infrastructure Pipeline (NIP) forward, taking a comprehensive view of financing India’s growth. As the country moves towards celebrating 100 years of independence, this visionary outlook will provide us with a reinvigorated pathway to attain success.