Opinion | Credit ecosystem rejig and policy stimulus needed for infrastructure

As India’s infrastructure funding gap widens to gargantuan levels, a fiscal push won’t be enough. What’s needed is a complete overhaul of the credit ecosystem plumbing so that private money starts flowing in materially.

To be sure, the Bharatiya Janata Party-led National Democratic Alliance government has committed to infusing ₹100 trillion into infrastructure over the next five years. But this magnitude of commitment will run into fiscal constraints sooner rather than later. And if that weren’t enough, the share of private sector investment in infrastructure has slumped, touching a decadal low of ~25% in fiscal 2018.

Why’s that? In three words, low risk appetite.