India would need $4.5 trillion in infrastructure investment by 2030 to sustain its growth ambitions, Pension Fund Regulatory and Development Authority (PFRDA) chairman Sivasubramanian Ramann said, seeking deeper capital markets commitments to such projects.
"Infrastructure investments have a multiple effect on economic growth," Ramann said at an infrastructure conference organised by state-backed financier NaBFID. "The estimate of the NITI Aayog and the World Bank says that India requires about $4.5 trillion of cumulative infrastructure investment until 2030 to sustain the growth trajectory that we are wishing to achieve."
He said that recent regulatory reforms, including the Reserve Bank of India's move to lower provisioning on under-construction project loans from 5% to 1%, should help ease funding constraints.
Ramann said that the financing burden is shifting from banks to pension and insurance funds, which are better suited for long-gestation projects. "We are therefore expecting that from 1st October 2025 we would see a revival in credit flow to stalled projects on account of the regulatory changes that have been made," he said.
Talking about the hurdles, Ramann said that high leverage, low credit ratings, and long project tenors keep many issuers dependent on bank loans. "Bond issuance by companies directly involved in infrastructure have been far less in terms of issuance volumes," he said. "Most of the infrastructure companies...do not have high credit ratings. Further, due to the long gestation periods for most of these projects, borrowers prefer raising mostly long tenor bonds." He added that such infrastructure companies end up borrowing funds mostly from banks and financial institutions instead of the bond market.
To address this, Ramann said that wider use of partial credit enhancement schemes, securitisation of infrastructure loans. The pension and insurance pools in the country are about ₹110-115 lakh crores and they are gradually opening up to more infrastructure investments, especially via investment grade bonds supported by credit enhancements.
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"Infrastructure investments have a multiple effect on economic growth," Ramann said at an infrastructure conference organised by state-backed financier NaBFID. "The estimate of the NITI Aayog and the World Bank says that India requires about $4.5 trillion of cumulative infrastructure investment until 2030 to sustain the growth trajectory that we are wishing to achieve."
He said that recent regulatory reforms, including the Reserve Bank of India's move to lower provisioning on under-construction project loans from 5% to 1%, should help ease funding constraints.
Ramann said that the financing burden is shifting from banks to pension and insurance funds, which are better suited for long-gestation projects. "We are therefore expecting that from 1st October 2025 we would see a revival in credit flow to stalled projects on account of the regulatory changes that have been made," he said.
Talking about the hurdles, Ramann said that high leverage, low credit ratings, and long project tenors keep many issuers dependent on bank loans. "Bond issuance by companies directly involved in infrastructure have been far less in terms of issuance volumes," he said. "Most of the infrastructure companies...do not have high credit ratings. Further, due to the long gestation periods for most of these projects, borrowers prefer raising mostly long tenor bonds." He added that such infrastructure companies end up borrowing funds mostly from banks and financial institutions instead of the bond market.
To address this, Ramann said that wider use of partial credit enhancement schemes, securitisation of infrastructure loans. The pension and insurance pools in the country are about ₹110-115 lakh crores and they are gradually opening up to more infrastructure investments, especially via investment grade bonds supported by credit enhancements.
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