The government is considering the creation of a ₹20,000 crore risk guarantee fund to boost private sector participation in India’s infrastructure push. Designed to underwrite project risks and enhance lender confidence, the proposed fund—likely to be managed by the National Credit Guarantee Trustee Company Ltd (NCGTC)—aims to make large-scale infrastructure projects more financially viable.

This initiative aligns with India’s broader plan to invest about USD 4.51 trillion (₹390 lakh crore) in infrastructure by 2030, a cornerstone of the nation’s ambition to become a USD 5 trillion economy.

The proposed fund would cover losses arising from policy uncertainty and other non-commercial risks, enabling lenders to extend bigger loans for large-scale projects.

“Besides, there should be additional safeguards by way of a minimum stake by the developer and risk-based premiums may be charged,” sources said.

For the fund to succeed, they added, its guarantee must be bankable, with timely assurance of payments.

The move comes as India plans to spend an estimated USD 4.51 trillion (around Rs 390 lakh crore) on infrastructure by 2030 to achieve the vision of a USD 5 trillion economy by 2025. According to the National Infrastructure Pipeline report, weak infrastructure remains one of the biggest hurdles to India’s growth ambitions.

“Infrastructure development can not only help remove some of these inefficiencies contributing immediately to economic expansion, but also support stronger long-term growth,” the report said.

Creating new and upgrading existing infrastructure is considered crucial for raising India’s competitiveness. “It will be especially critical for the success of the Make in India programme as manufacturing competitiveness critically depends on infrastructure,” the report added.