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Finance Ministry to Hold High-Level Meeting on Infrastructure Funding with Banks and FIs on September 11

With ₹11.21 lakh crore capex target for FY26 and RBI’s relaxed project finance norms, Centre seeks higher credit flow to roads, railways, power, and housing sectors.
Indian Masterminds Stories

New Delhi: The Finance Ministry is set to convene a crucial meeting with heads of major financial institutions, including large public and private sector banks, on September 11 to deliberate on infrastructure funding challenges and opportunities. The meeting will be chaired by Financial Services Secretary M. Nagaraju, sources confirmed.

The agenda of the meeting is expected to focus on credit availability for the infrastructure sector, a priority area for the government given its aggressive capital expenditure push. Finance Minister Nirmala Sitharaman has earmarked a record ₹11.21 lakh crore capex target for FY26, underscoring the administration’s commitment to public infrastructure creation as a growth driver.

However, the government’s capex momentum hit a roadblock last year. While the FY25 Budget had allocated ₹11.1 lakh crore, the revised estimates pegged spending at ₹10.18 lakh crore, leaving a shortfall of nearly ₹93,000 crore. This gap has prompted urgent discussions with lenders to ensure smoother funding pipelines for projects in sectors like roads, railways, power, housing, and urban development.

Economic Survey and RBI’s Role

The Economic Survey 2024–25, tabled in Parliament, stressed that India must continuously scale up infrastructure investment over the next two decades to sustain high GDP growth. It also highlighted the need to boost private-sector participation and explore innovative funding mechanisms such as infrastructure investment trusts (InvITs), blended finance, and green bonds.

In parallel, the Reserve Bank of India (RBI) has already moved to ease funding constraints. Earlier this year, it issued final directions on project finance norms, significantly relaxing provisioning requirements for banks. From October 1, lenders will maintain a 1.25% provision on commercial real estate projects during the construction phase, compared to the earlier proposed 5%, providing major relief to the banking sector. Residential and other project categories will see even lower provisioning levels, encouraging greater credit flow.

Strategic Importance

India’s massive infrastructure build-out is central to the government’s Vision 2047, with projects like Gati Shakti, National Infrastructure Pipeline (NIP), and smart urban missions demanding trillions in investment. Experts believe aligning the financial ecosystem—including banks, NBFCs, and development finance institutions (DFIs)—with these ambitions is vital.

Read also: Finance Ministry to Hold Two-Day PSB Manthan from Sept 12 to Drive Next-Gen Banking Reforms


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