Unlocking PSU Assets for Infrastructure Financing

Focusing on infrastructure as a key driver of economic growth, the government is embarking on a massive PSEs asset monetisation programme as part of Infrastructure Vision 2025. This ambitious programme is meant to raise long-term financing for infrastructure development in order to put our Covid-hit economy back on rails, and achieving the goal of making India a $5 trillion economy by 2024-25.
Vinod Behl
India faces an uphill task of meeting infra financing need of $150-$300 billion per annum. According to rating agency CRISIL, urban infrastructure and railways have the highest demand for capital. As infrastructure projects are complex with long gestation/payback period, they depend on long-term financing for successful execution. But despite infrastructure being classified as a priority sector, funding by banks is limited due to their rising NPAs and the banks inability to meet the massive capital needs of the infrastructure sector. This is also evident from the latest statistics, according to which, as many as 448 infrastructure projects with financing constraints as the major hurdle, are facing long delays, with a cost overrun of ₹4.02 lakh crore. The corona pandemic has further compounded the problem.