Budget 2026: To ease infra funding crunch, govt mulls ₹25,000 crore risk guarantee fund
₹25,000 crore safety net, as the Union Budget for FY26 could unveil a risk guarantee fund designed to ease financing bottlenecks and attract capital to stalled projects. The move comes amid rising project delays, cost overruns, and higher borrowing costs that have long constrained investment flows into the sector.Modelled on credit guarantee schemes for small businesses, the fund, likely managed by the National Credit Guarantee Trustee Company (NCGTC), would underwrite development risks for infrastructure projects, allowing banks and financial institutions to lend on easier terms, said two government officials aware of the development.
The proposal was submitted to the finance ministry by a committee set up under the National Bank for Financing Infrastructure and Development (NaBFID).Government estimates suggest India needs roughly $2.2 trillion in infrastructure investment by 2030 to sustain its $7 trillion growth ambition. Experts say the fund could serve as a vital credit enhancement tool, provided its risk pricing and underwriting are managed effectively.The proposed risk guarantee fund, which has been under discussion within the government for some time, will receive its initial corpus from the Union Budget.
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