The proposed fund would likely be managed by the National Credit Guarantee Trustee Company Limited (NCGTC). It 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 told PTI.
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.Experts have noted that failing to close the infrastructure gap can hamper corporate growth and investments, with inefficiencies costing the economy 4-5 per cent of GDP, the report noted.
The Rs 20,000 crore risk guarantee fund is designed to mitigate such challenges and incentivize private participation by sharing risks, helping India accelerate infrastructure development in line with its long-term economic goals.
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