Investing in the Economy

Public Private Partnership in Infrastructure : Infrastructure-related ministries to come up with a 3-year pipeline of projects in PPP mode, States also encouraged.

Support to States for Infrastructure : An outlay of ₹1.5 lakh crore proposed for the 50-year interest free loans to states for capital expenditure and incentives for reforms.

Asset Monetization Plan 2025-30 : Second Plan for 2025-30 to plough back capital of ₹ 10 lakh crore in new projects announced.

Jal Jeevan Mission : Mission to be extended until 2028 with an enhanced total outlay. The Jal Jeevan Mission (JJM), launched by the Government of India in August 2019, aims to provide safe and adequate drinking water through individual household tap connections by 2024 to all rural households in India. 

Funding Pattern:

• Himalayan and North-Eastern States: 90:10 (Centre:State).

• Other States: 50:50 (Centre:State).

• Union Territories: 100% funded by the Central Government. 

Progress and Achievements : Household Coverage: As of October 2024, 15.19 crore rural households have been provided with tap water connections, increasing coverage from 17% in 2019 to 78.58%. State and UT Achievements: Eleven States/UTs, including Goa, Telangana, Haryana, and Gujarat, have achieved 100% tap water coverage in rural households.  Institutional Access: Over 9.29 lakh schools and Anganwadi centres now have access to clean water. 

Impact and Significance

• Health Improvements: Access to clean drinking water is expected to reduce water-borne diseases, potentially decreasing under-five mortality rates by 25% and preventing approximately 4 lakh diarrhoeal deaths annually. 

• Economic Benefits: Improved health and reduced medical expenses could lead to economic savings of up to ₹8.37 lakh crore. 

• Employment Generation: The mission is projected to create approximately 59.93 lakh direct and 2.22 crore indirect jobs during the construction phase, with additional employment opportunities in operation and maintenance. 

• Environmental Sustainability: JJM promotes sustainable water management practices, including rainwater harvesting and greywater reuse, contributing to environmental conservation.

Urban Challenge Fund : An Urban Challenge Fund of ₹ 1 lakh crore announced to implement the proposals for ‘Cities as Growth Hubs’, ‘Creative Redevelopment of Cities’ and ‘Water and Sanitation’, allocation of ₹ 10,000 crore proposed for 2025-26. The Urban Challenge Fund (UCF), introduced in the Union Budget 2025-26, is a ₹1 lakh crore initiative aimed at transforming Indian cities into dynamic growth hubs. It focuses on creative redevelopment, enhancing water and sanitation infrastructure, and promoting sustainable urban development.

Key Features

Funding Structure: The UCF will finance up to 25% of the cost of eligible, bankable urban infrastructure projects. The remaining 75% is expected to be mobilized by cities through municipal bonds, bank loans, and public-private partnerships (PPPs), with at least 50% coming from these market-based sources. Initial Allocation: An allocation of ₹10,000 crore has been proposed for the fiscal year 2025-26 to kick-start the initiative. 

Focus Areas:

• Transforming cities into economic growth hubs.

• Creative redevelopment of urban spaces.

• Enhancing water supply and sanitation services. 

• Urban Reforms: The fund incentivizes states to implement urban sector reforms related to governance, municipal services, land use, and urban planning. 

Role of Public-Private Partnerships (PPPs) : PPPs are central to the UCF's strategy, enabling the government to leverage private sector investment, expertise, and efficiency. This collaborative approach aims to accelerate project delivery, foster innovation, and ensure cost-effective solutions in urban infrastructure development. 

Complementarity with Existing Initiatives

The UCF complements existing urban development programs such as the Smart Cities Mission and the Atal Mission for Rejuvenation and Urban Transformation (AMRUT). By providing additional financial support and encouraging market-based funding, the UCF seeks to enhance the effectiveness and reach of these initiatives. 

Power Sector Reforms

Government will incentivize electricity distribution reforms and augmentation of intra-state transmission capacity by states. This will improve financial health and capacity of electricity companies. Additional borrowing of 0.5 per cent of GSDP will be allowed to states, contingent on these reforms. 

Nuclear Energy Mission for Viksit Bharat : Amendments to the Atomic Energy Act and the Civil Liability for Nuclear Damage Act to be taken up. Nuclear Energy Mission for research & development of Small Modular Reactors (SMR) with an outlay of ₹20,000 crore to be set up, 5 indigenously developed SMRs to be operational by 2033.

Shipbuilding : The Shipbuilding Financial Assistance Policy to be revamped. Large ships above a specified size to be included in the infrastructure harmonized master list (HML).

Maritime Development Fund : A Maritime Development Fund with a corpus of ₹ 25,000 crore to be set up, with up to 49 per cent contribution by the Government, and the balance from ports and private sector. The Maritime Development Fund (MDF), announced in the Union Budget 2025-26, is a ₹25,000 crore initiative aimed at revitalizing India's maritime sector. This fund is designed to provide long-term, low-cost financing to bolster shipbuilding, shipping, and related infrastructure, thereby enhancing India's position in the global maritime industry.

Key Features of the Maritime Development Fund

1. Corpus and Funding Structure: The MDF will have a total corpus of ₹25,000 crore, with the government contributing up to 49%. The remaining funds will be mobilized from ports and the private sector. 

2. Investment Goals: By 2030, the fund aims to attract up to ₹1.5 lakh crore in investments into the shipping sector. 

3. Financial Support Mechanisms: The MDF will offer various forms of financial assistance, including debt, equity, viability gap funding (VGF), and buyer credit, to support indigenous shipbuilding and other maritime infrastructure projects. 

Strategic Objectives

1. Boost Domestic Shipbuilding: The fund aims to reduce India's reliance on foreign vessels by promoting domestic shipbuilding, thereby strengthening the country's maritime capabilities. 

2. Develop Shipbuilding Clusters: Shipbuilding and repair clusters are planned across five states—Gujarat, Maharashtra, Kerala, Andhra Pradesh, and Odisha—to enhance the range, categories, and capacity of ships. 

3. Promote Green Shipping: The MDF will support the development of green and energy-efficient vessels, contributing to India's goal of transitioning to renewable energy sources in coastal and inland waterway shipping within the next five years. 

Complementary Initiatives

Shipbreaking Credit Note Scheme: To promote the circular economy, a new scheme will issue credit notes worth 40% of the scrap value of vessels recycled at Indian facilities, which can be redeemed against the purchase of new Made-in-India ships. 

The Maritime Development Fund is a pivotal component of India's broader strategy to become a global maritime hub by 2047. By fostering domestic shipbuilding, enhancing infrastructure, and promoting sustainable practices, the MDF aims to position India among the world's top five shipbuilding nations.

UDAN - Regional Connectivity Scheme A modified UDAN scheme announced to enhance regional connectivity to 120 new destinations and carry 4 crore passengers in the next 10 years. Also to support helipads and smaller airports in hilly, aspirational, and North East region districts. UDAN has enabled 1.5 crore middle-class people to meet their aspirations for speedier travel. The scheme has connected 88 airports and operationalized 619 routes. The scheme will also support helipads and smaller airports in hilly, aspirational, and North East region districts.

Greenfield Airport in Bihar Greenfield airports announced in Bihar, in addition to the expansion of the capacity of Patna airport and a brownfield airport at Bihta.

Western Koshi Canal Project in Mithilanchal : Financial support for the Western Koshi Canal ERM (Extension, Renovation, and Modernization ) Project in Bihar.

Mining Sector Reforms A policy for recovery of critical minerals from tailings to be brought out.
 

SWAMIH Fund 2 : A fund of ₹ 15,000 crore aimed at expeditious completion of another 1 lakh dwelling units, with contribution from the Government, banks and private investors announced. The Special Window for Affordable and Mid-Income Housing (SWAMIH) Fund 2.0 is a ₹15,000 crore initiative announced in the Union Budget 2025-26. Its primary objective is to expedite the completion of stalled residential projects across India, particularly benefiting middle-class homebuyers who are burdened with both home loan EMIs and rental expenses.

Background and Achievements of SWAMIH Fund 1

Launched in November 2019, the original SWAMIH Fund was established to provide priority debt financing for the completion of stalled, brownfield, and RERA-registered residential projects in the affordable and mid-income housing segments. Managed by SBICAP Ventures Ltd., a subsidiary of the State Bank Group, the fund has successfully completed 50,000 housing units, with an additional 40,000 units expected to be delivered by the end of 2025. 

Key Features of SWAMIH Fund 2.0

• Corpus: ₹15,000 crore.

• Structure: A blended finance facility with contributions from the government, banks, and private investors. 

• Target: Completion of an additional 1 lakh housing units in stalled projects. 

• Management: Administered by SBICAP Ventures Ltd., ensuring professional oversight and efficient fund deployment. 

Eligibility Criteria for Projects

• Project Type: Residential developments primarily catering to the affordable and mid-income housing segments.

• Project Status: Stalled or significantly delayed due to financial constraints.

• The Economic Times

• RERA Compliance: Must be registered under the Real Estate (Regulation and Development) Act (RERA).

• Construction Progress: At least 30% of the construction work should be completed.

• Financial Viability: Projects should be net worth positive, meaning the value of sold receivables plus unsold inventory exceeds the cost required to complete the project and service the investment by the fund.

• Financial Status: Projects that have been declared Non-Performing Assets (NPAs) or are undergoing proceedings before the National Company Law Tribunal (NCLT) under the Insolvency and Bankruptcy Code (IBC) are eligible.

• Developer Profile: Open to first-time developers, established developers with troubled projects, and those with a history of stalled projects or customer complaints.

• Legal Considerations: Projects with litigation issues are also considered, as the fund aims to be the lender of last resort for distressed projects. 

Tourism for employment-led growth : Top 50 tourist destination sites in the country to be developed in partnership with states through a challenge mode. The following measures will be taken for facilitating employment-led growth:

• Organizing intensive skill-development programmes for our youth including in Institutes of Hospitality Management; 

• Providing MUDRA loans for homestays;

• Improving ease of travel and connectivity to tourist destinations; 

• Providing performance-linked incentives to states for effective destination management including tourist amenities, cleanliness, and marketing efforts; and

• Introducing streamlined e-visa facilities along with visa-fee waivers for certain tourist groups.

Investing in Innovation

Research, Development and Innovation : ₹20,000 crore to be allocated to implement private sector driven Research, Development and Innovation initiative announced in the July Budget.

Deep Tech Fund of Funds Deep Tech Fund of Funds to be explored to catalyze the next generation startups.

PM Research Fellowship 10,000 fellowships for technological research in IITs and IISc with enhanced financial support.

Gene Bank for Crops Germplasm 2nd Gene Bank with 10 lakh germplasm lines to be set up for future food and nutritional security.

National Geospatial Mission A National Geospatial Mission announced to develop foundational geospatial infrastructure and data.

Objectives of the National Geospatial Mission

• Modernization of Land Records: Digitizing and updating land records to ensure accuracy and transparency, thereby reducing land disputes and facilitating efficient land management.

• Enhancement of Urban Planning: Utilizing geospatial data to inform and improve urban development strategies, infrastructure planning, and resource allocation.

• Development of Geospatial Infrastructure: Establishing a robust geospatial data framework to support various sectors, including agriculture, disaster management, and environmental monitoring.

• Integration with PM Gati Shakti: Leveraging the existing PM Gati Shakti framework to facilitate coordinated planning and implementation of infrastructure projects across the country.

Gyan Bharatam Mission

A Gyan Bharatam Mission for survey, documentation and conservation of our manuscript heritage with academic institutions, museums, libraries and private collectors to be undertaken to cover more than 1 crore manuscripts announced. These manuscripts, housed in academic institutions, museums, libraries, and private collections, span various disciplines, including philosophy, science, medicine, and art.

Integration with Modern Education: The initiative aligns with the National Education Policy (NEP) 2020, aiming to integrate traditional Indian knowledge into contemporary education and research frameworks.
 

Significance

The Gyan Bharatam Mission represents a concerted effort to preserve India's rich cultural and intellectual legacy. By digitizing and centralizing access to ancient manuscripts, the mission not only protects these invaluable resources from deterioration but also democratizes access to knowledge, fostering research and innovation rooted in India's traditional wisdom. 

EXPORTS AS THE 4TH ENGINE OF DEVELOPMENT

Export Promotion Mission

An Export Promotion Mission, with sectoral and ministerial targets, driven jointly by the Ministries of Commerce, MSME, and Finance to be set up. The Export Promotion Mission (EPM), announced in the Union Budget 2025–26 with an allocation of ₹2,250 crore, is a strategic initiative aimed at enhancing India's export competitiveness, particularly for Micro, Small, and Medium Enterprises (MSMEs). 

Jointly driven by the Ministries of Commerce, MSME, and Finance, the mission focuses on facilitating easier access to export credit, promoting alternative financing instruments like cross-border factoring, and assisting MSMEs in navigating non-tariff measures in global markets. 

Key Features of the Export Promotion Mission

1. Financial Support for MSMEs : Enhanced Credit Access: Exporter MSMEs can now avail increased credit benefits from ₹5 crore to ₹10 crore, generating additional credit of ₹1.5 lakh crore over the next five years. Well-performing exporter MSMEs are eligible for term loans up to ₹20 crore. 

2. Cross-Border Factoring Support: The mission promotes the use of export factoring services to reduce dependence on traditional bank financing. This includes efforts to lower factoring costs and provide interest subvention to factoring companies, aiming to align with the global average where factoring constitutes about 3% of merchandise exports. 

3. How Export Factoring Works?

4. An exporter ships goods to a foreign buyer on credit terms (e.g., 60 days). The exporter sells the invoice to a factor (usually a bank or NBFC). The factor pays 80–90% of the invoice amount upfront. The factor collects the full amount from the foreign buyer when due. Once payment is received, the remaining balance (minus fees/interest) is sent to the exporter.

5. Digital Trade Infrastructure: BharatTradeNet (BTN) : A new digital public infrastructure, BharatTradeNet (BTN), will be established to digitize and streamline India's international trade ecosystem. BTN aims to eliminate paper-based processes, improve trade finance access, and enhance regulatory compliance by integrating key stakeholders such as Customs, DGFT, GSTN, banks, and exporters into a unified digital platform. 

6. Sector-Specific Export Incentives : Marine Products: To boost exports in the marine sector, customs duty on frozen fish paste (Surimi) has been reduced from 30% to 5%, and duty on fish hydrolysate has been reduced to 5% from 15%. 

7. Export Readiness Programs: The mission includes programs to train MSMEs in e-commerce, digital marketing, and international trade regulations. 

8. Compliance Facilitation: Support will be provided to MSMEs to tackle non-tariff measures imposed by other countries, ensuring smoother access to international markets. 

The schemes under the Export Promotion Mission are currently being formulated and are expected to be rolled out within 4 to 5 months. These schemes will focus on providing credit at easy terms, promoting alternative financing instruments, and offering assistance to deal with non-tariff measures imposed by other countries. 

By integrating digital solutions like BharatTradeNet and providing targeted financial support, the mission aims to create a more predictable and efficient trade environment, aligning with India's goal of achieving $2 trillion in exports.

BharatTradeNet

‘BharatTradeNet’ (BTN) for international trade to be set-up as a unified platform for trade documentation and financing solutions. BharatTradeNet is a proposed digital platform aimed at transforming India's trade infrastructure. Here's a catchy overview:

BharatTradeNet is a futuristic trade facilitation network designed to digitally integrate India’s exporters, importers, logistics providers, customs authorities, and financial institutions onto a single, unified platform. Think of it as India’s own trade-tech super app, streamlining everything from documentation to shipment tracking.

Key Components:

• Exporters & Importers: Engage in trade activities, submitting and receiving necessary documentation.

• BharatTradeNet Platform: Central hub that digitizes and streamlines trade processes, ensuring seamless interaction among all stakeholders.

• Logistics Providers: Offer real-time tracking and updates on shipments, integrated directly into the platform.

• Customs Authorities: Access and process digital documents for swift clearance procedures.

• Banks & NBFCs: Provide embedded financing solutions, leveraging real-time data for risk assessment and credit provision.

• Retail Banker International

• Regulatory Bodies: Ensure compliance with international standards and facilitate secure data exchange.

Key Objectives:

• Simplify cross-border trade by reducing paperwork and delays.

• Boost MSMEs by making international trade more accessible.

• Enable real-time tracking and transparency across the supply chain.

• Promote digital exports and integrate with global trade systems.

Expected Features

• Unified digital documentation and e-invoicing system.

• AI-powered risk assessment and compliance tools.

• Integration with ports, customs, GSTN, and DGFT.

• Trade analytics dashboard for exporters and policymakers.

• It fits well under India’s push for “Digital India” + “Make in India”, making Indian trade faster, smarter, and more globally competitive.

Benefits of BharatTradeNet:

• Digitization of Over 30 Trade Documents: Including Bills of Lading and Promissory Notes, facilitating secure electronic issuance and storage.

• Real-Time Data Sharing: Enhances transparency and efficiency across the trade ecosystem.

• Embedded Trade Financing: Enables exporters and importers, especially MSMEs, to access credit seamlessly within the trade process.

• Standardization & Compliance: Aligns with global standards like UNCITRAL's MLETR, ensuring smooth international transactions. 

• The United Nations Commission on International Trade Law (UNCITRAL) is the principal legal body of the United Nations system in the field of international trade law. Established in 1966 by the UN General Assembly through Resolution 2205(XXI), UNCITRAL's mandate is to promote the progressive harmonization and unification of international trade law.

• The Model Law on Electronic Transferable Records (MLETR), adopted by the United Nations Commission on International Trade Law (UNCITRAL) in 2017, provides a legal framework for the use of electronic transferable records (ETRs) that are functionally equivalent to paper-based transferable documents such as bills of lading, promissory notes, and warehouse receipts. 

• Integration with Existing Initiatives: Complementary to platforms like the PM Gati Shakti, promoting multimodal connectivity.

• By centralizing and digitizing trade processes, BharatTradeNet aims to reduce bureaucratic delays, lower transaction costs, and make India's exports more competitive on the global stage.

National Framework for GCC 

A national framework to be formulated as guidance to states for promoting Global Capability Centres in emerging tier 2 cities.

Global Capability Centres (GCCs)—also known as Global In-house Centres (GICs)—are offshore units of multinational corporations (MNCs) that perform a wide range of strategic and support functions. These centres are typically set up in talent-rich and cost-effective countries like India, the Philippines, and Poland.

What GCCs Do:

• They handle various operations, such as:

• IT services and software development

• Finance & accounting

• HR and payroll

• Analytics, AI/ML, and R&D

• Customer support and shared services

Why Companies Set Them Up

• Cost efficiency – Lower operational and labor costs.

• Access to skilled talent – Especially in countries like India with a strong tech workforce.

• 24/7 operations – Time zone advantage supports round-the-clock work.

• Scalability and flexibility – Easier to expand teams and services.

• Strategic value – Many GCCs are moving from support functions to innovation hubs.

India hosts over 1,600+ GCCs.

REFORMS 

FDI in Insurance Sector : The FDI limit for the insurance sector to be raised from 74 to 100 per cent, for those companies which invest the entire premium in India.

Credit Enhancement Facility by NaBFID : NaBFID to set up a ‘Partial Credit Enhancement Facility’ for corporate bonds for infrastructure. Partial Credit Enhancement is a financial support provided—usually by a government-backed institution or multilateral agency—that guarantees part of the debt repayment of a bond issue. It does not guarantee the full repayment, but a part of it—hence the term “partial.”

The National Bank for Financing Infrastructure and Development (NaBFID) is a specialized Development Finance Institution (DFI) established by the Government of India in 2021 under the NaBFID Act, 2021. It aims to address the long-term financing needs of India's infrastructure sector and to develop the bonds and derivatives markets necessary for infrastructure financing .

The National Bank for Financing Infrastructure and Development (NaBFID) is a specialized development financial institution established by the Government of India in 2021 under the NaBFID Act, 2021. Its primary mandate is to address the long-term financing needs of India's infrastructure sector, which is crucial for the country's economic growth and development.

NaBFID has an authorized share capital of ₹1,00,000 crore, with the central government holding at least 26% of the shares at all times.

Funding Sources: The institution can raise funds through loans, issuance of bonds and debentures, and borrowing from multilateral institutions like the World Bank and Asian Development Bank. 

Grameen Credit Score : Public Sector Banks to develop ‘Grameen Credit Score’ framework to serve the credit needs of SHG members and people in rural areas.
 

Investment Friendliness Index of States : An Investment Friendliness Index of States to be launched in 2025 to further the spirit of competitive cooperative federalism announced.

Jan Vishwas Bill 2.0 : The Jan Vishwas Bill 2.0 to decriminalize more than 100 provisions in various laws. The Jan Vishwas Bill 2.0 is a legislative initiative by the Indian government aimed at further enhancing the ease of doing business by decriminalizing minor offences across various laws. Building upon the Jan Vishwas (Amendment of Provisions) Act, 2023—which decriminalized 183 provisions across 42 central laws—the 2.0 version seeks to extend these reforms.