India’s infrastructure policy is not about replacing public investment with private money. The Economic Survey 2025-26 argues that both are needed: government capital spending remains substantial, while private participation must expand to help meet the country’s long-term infrastructure needs. Its prescription is not blanket deregulation, but more predictable rules, better-prepared projects, clearer contracts and stronger public institutions.
Why India wants more private investment in infrastructure
Infrastructure needs are too large for public capital alone to meet, the Economic Survey 2024-25 argued in the context of the country’s Viksit Bharat@2047 ambitions. It called for greater private participation alongside stronger capacity to prepare projects and manage risk, revenue-sharing, contracts, disputes and project closure. (Economic Survey 2024-25 summary)
Public investment has continued to grow. The Ministry of Finance’s 29 January 2026 summary of the Economic Survey 2025-26 says central government capital expenditure rose from ₹2.63 lakh crore in FY18 to ₹11.21 lakh crore in FY26 (budget estimate); effective capital expenditure for FY26 (budget estimate) was ₹15.48 lakh crore. These are public-spending figures, not measures of private investment. (Economic Survey 2025-26 infrastructure summary)
The same government summary reports that non-bank financial company credit to the commercial sector grew at a 43.3% compound annual growth rate during FY20–FY25, and describes infrastructure investment trusts and real estate investment trusts as channels for mobilizing long-term institutional capital. It also reports, citing the Survey, that India was among the top five low- and middle-income economies for private infrastructure investment and accounted for over 90% of South Asia’s private infrastructure investment. Those rankings and shares are reported here as Indian government summaries of Survey findings, not as independently checked calculations. (Economic Survey 2025-26 infrastructure summary)
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What simpler regulation should mean
In the Survey’s account, a more workable environment for private capital means stable policy regimes, standardized contracts and clearer regulatory responsibilities—not simply fewer rules or weaker safeguards. Investors need to understand what the government is procuring, how revenue and risks are divided, whether the project is ready to build, and how contract changes and disputes will be handled over its life. (Economic Survey 2025-26, Chapter 9)
Predictability matters particularly for construction. If key permissions, land access or utility relocation are unresolved, bidders may struggle to estimate cost and schedule reliably. Uncertainty can make bids more expensive, discourage participation or leave the public authority and contractor arguing over responsibility after award.
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Where private participation is more established—and where it needs work
The Economic Survey 2025-26 describes roads, ports, power and renewable energy as relatively mature areas for private capital. It identifies health, education, warehousing, sanitation, urban infrastructure, green hydrogen and the wider energy transition as areas where the next generation of public-private partnerships (PPPs) will need careful design. A model that works for a road concession may not fit a service whose public value is measured in health, education or sanitation outcomes. (Economic Survey 2025-26, Chapter 9)
For newer or socially critical sectors, transferring as much risk as possible to a private partner may be inadequate. The Survey points instead toward closer public-private alignment, including co-design and sharing some early-stage risks. The aim is to structure a partnership around viable delivery and service outcomes, rather than treat risk transfer or financial closure as the sole measure of success. (Economic Survey 2025-26, Chapter 9)
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What must improve before a project goes to tender
Project preparation is a central constraint. The Survey identifies unresolved land acquisition, statutory clearances, demand assessment and utility shifting as sources of weak PPP outcomes. These are often matters public authorities are better placed to resolve before inviting bids; leaving them open can force bidders to price risks they cannot assess efficiently. (Economic Survey 2025-26, Chapter 9)
- Confirm project readiness: make land, clearances and utility relocation status clear before tendering.
- Test demand and revenue assumptions: use credible assessments rather than relying on optimistic forecasts to support a project’s financial case.
- Allocate risks to the party able to manage them: specify responsibilities and remedies for foreseeable risks instead of shifting uncertainty wholesale.
- Set out contract and regulatory rules: use clear, consistent terms for performance, change management, disputes and oversight.
- Build delivery capacity: ensure public agencies can prepare, procure, monitor and manage long-term contracts.
How India’s PPP approach is evolving
The Survey describes lessons from earlier PPP projects that experienced stress or failure, followed by improvements to model concession agreements, policy guidance and institutional practices. Its proposed next step is to build a more dependable market for projects, not merely to execute individual transactions. That means publishing multi-year project pipelines, preparing bankable projects, professionalizing PPP cells and tracking performance. (Economic Survey 2025-26, Chapter 9)
The approach also has historical roots. A 2015 committee chaired by Vijay Kelkar recommended stronger institutions and governance, improved risk allocation, contracts focused on service delivery and careful use of viability gap funding where user charges cannot support a robust revenue stream. These are committee recommendations and should not be read as proof that every measure has since been adopted. (PIB summary of the Kelkar Committee PPP report)
For contractors and investors, the practical test is whether a proposed project combines a credible pipeline with resolved pre-construction issues, understandable obligations and a public authority capable of managing the partnership. Clearer, more stable rules can help—but they cannot compensate for a project that is not ready or a contract that assigns risks unrealistically.
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Further reading
The Asian Development Bank’s Public–Private Partnership Monitor: India, published in September 2024, examines the national PPP landscape, sector-specific partnerships and local-government PPP policy, including transport, energy and communication. (ADB publication page)
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