Private capital to underpin India’s Viksit Bharat
On 18 September, the Department of Economic Affairs (DEA) Secretary Anuradha Thakur addressed the Conference of Finance Ministers and Finance Secretaries of States and Union Territories in New Delhi. She underscored that the financial magnitude required for India’s Viksit Bharat vision cannot be met through government budgets alone and that private‑sector financing must play a larger role.
### Conference focus
The two‑day gathering, titled *Financing India’s Journey towards Viksit Bharat*, examined financing challenges, policy priorities and macroeconomic developments. Key topics included agricultural transformation, the energy transition and the role of innovative financing mechanisms.
### State‑level action
Working groups comprising state officials have been set up to map sector‑specific financing needs. These groups will compile their findings and present them to stakeholders, ensuring that state plans align with national objectives.
### Private capital as a complement
N K Singh, President of the Institute of Economic Growth and chairman of the 15th Finance Commission, cautioned that private capital should complement, not replace, public finance. He highlighted the scarcity of bankable projects as the main barrier to attracting private investment. Singh advocated a hybrid annuity model to ease risk pressures and urged every state to build a robust pipeline of projects that can tap multilateral development banks.
### Macro‑economic backdrop
India sits at an “inflection point” following a sovereign rating upgrade by Japanese credit rating agency JCR. Singh noted that the government is on track to achieve a 50 % debt‑to‑GDP target by 2030‑31, with a one‑percentage‑point margin. He also pointed out the shift from a Union‑versus‑states fiscal approach to a more collaborative fiscal federalism, suggesting that the GST Council model could be replicated in areas such as urbanisation, climate change and logistics.
### State financing targets
A presentation on *Financing for Viksit States* revealed that most of the Viksit Bharat agenda falls under state jurisdiction. States have earmarked roughly Rs 11 lakh crore for capital outlay, equating to about 2.4 % of gross state domestic product (GSDP). The recommendation is to raise this to 3 % of GSDP.
Potential avenues for mobilising additional resources include:
* Land and urbanisation value capture * Housing finance and deeper credit flows * Private investment in renewable energy, energy storage and critical minerals * Artificial intelligence and data centres * Tourism and agriculture value chains
These sectors offer opportunities for both public‑private partnerships and direct private investment, thereby expanding the overall financing base for Viksit Bharat.
What this means for India
The call for private‑sector financing signals a shift in India’s development strategy. By leveraging private capital, the country can accelerate infrastructure, technology and sustainability projects without overburdening public finances. States, in particular, are being urged to adopt proactive financing strategies and build credible project pipelines that attract external funding.
What to watch next
* The outcomes of the state‑level working groups and their proposed financing plans. * How the hybrid annuity model is adopted across different states. * Progress on the 50 % debt‑to‑GDP target and any subsequent rating agency updates. * The replication of the GST Council model in other policy domains.
These developments will shape the pace and scale of India’s Viksit Bharat journey in the coming years.