BRICS economies are key growth engines but face capital mobilisation hurdles: Sitharaman
The minister believes that public capital must act as a catalyst — not a substitute for private investment, and in support of this principle
Union Minister for Finance and Corporate Affairs Nirmala Sitharaman on Wednesday said BRICS economies represent major growth engines of the global economy, and face common structural constraints in mobilising private capital at scale.
Sitharaman was speaking at the seminar on “The Role of the New Development Bank in Mobilising Private Capital in Member Countries”, on the sidelines of BRICS Finance Minsters’ and Central Bank Governors (FMCBG) Meeting, being held in Jaipur.
She said the challenge is not merely the availability of capital, but the creation of confidence, stability, predictability, and credible long-term frameworks, which are essential to unlock sustained private participation across BRICS member countries.
With regard to boosting infrastructure, she noted the government has strengthened its infrastructure ecosystem through sustained public capital expenditure and complementary structural reforms. Public investment has expanded significantly compared to a decade ago, reflecting a deliberate strategy to create productive national assets across highways, railways, ports, logistics systems, digital infrastructure, and energy networks.
The minister believes that public capital must act as a catalyst — not a substitute for private investment, and in support of this principle. She highlighted that the government carried out multiple reforms, such as viability gap Funding (VGF) to support financially constrained but socially desirable projects.
Some of the reforms include hybrid annuity model (HAM) to ensure balanced risk-sharing in road infrastructure.
Credit enhancement mechanisms to improve project bankability and infrastructure Investment Trusts (InvITs) to recycle capital and attract long-term institutional investors.
Furthermore, Sitharaman stated that the budget 2026-27 introduced several targeted measures to facilitate private sector investment including, new dedicated freight corridors, new high-speed rail corridors, operationalising new national waterways and coastal cargo promotion scheme.
