Ambitious Infrastructure Boost: Rs 1.5 Lakh Crore Interest-Free Loans to States

Finance Minister Nirmala Sitharaman announced a Rs 1.5 lakh crore interest-free loan scheme for states to enhance infrastructure. The Union Budget 2025-26 includes a new asset monetization plan, aiming to reinvest Rs 10 lakh crore in new projects by 2030, with a focus on PPP implementation.

Finance Minister Nirmala Sitharaman has unveiled a major fiscal initiative aimed at rejuvenating state infrastructure with Rs 1.5 lakh crore in 50-year, interest-free loans. Announced as part of the Union Budget for 2025-26, this formidable investment is designed to catalyze development across states.

Sitharaman highlighted the launch of a second asset monetization plan set for 2025-30, intended to recycle Rs 10 lakh crore into innovative projects. This follows the earlier success of the first plan implemented in 2021, underlining the government's commitment to systematic infrastructure advancement.

Tailored regulatory and fiscal strategies will support the overarching scheme. Each infrastructure-focused ministry is tasked with crafting a three-year project pipeline using Public-Private Partnerships (PPP), while states are urged to propose PPP plans utilizing the India Infrastructure Project Development Fund (IIPDF).