Achieving India’s vision will require significant private sector investment as government spending alone cannot meet the country’s massive financing requirements, Economic Affairs Secretary Anuradha Thakur said on Friday, PTI reported.
Addressing a conference of finance ministers and finance secretaries of states and Union Territories, Thakur said private sector financing would have a crucial role in supporting the scale of transformation envisaged under the Viksit Bharat goal.
“We know that we meet today in the backdrop of ongoing global difficulties. Under these circumstances, and because of the scale of transformation we envisage towards ourselves to reach our shared goal, it needs to be borne in mind that this scale cannot be met solely by government budgets, and that private sector financing will need to play a critical role,” Thakur said.
The conference, themed ‘Financing India’s Journey Towards Viksit Bharat’, will focus on identifying financing challenges and exploring innovative ways to mobilise resources, she said.
India’s sovereign rating upgrades reflect economic strength
Thakur also highlighted India’s recent sovereign rating upgrades by international agencies, saying they reflected growing confidence in the country’s economic fundamentals and investment environment.
She said India’s macroeconomic stability, fiscal prudence and improving business climate had strengthened its position in the global investment landscape.
Earlier this month, JCR upgraded India’s sovereign rating to ‘A-‘, marking the first such upgrade by the agency in 35 years. The move was attributed to India’s solid economic growth and strong financial system.
India’s sovereign rating was also upgraded last year by to BBB, Japan’s Rating and Investment Information Inc. to BBB and Morningstar DBRS to BBB.
Thakur said the upgrades represented global recognition of India’s economic resilience and medium-term growth prospects despite continuing global uncertainties.
She also cited the World Economic Forum’s Chief Economists Outlook of May 2026, which identified India among the most attractive destinations for the global business environment.
NK Singh calls for higher savings, private capital
NK Singh, former chairman of the 15th Finance Commission, said India should raise its gross domestic savings rate to 38-40% of GDP from the current 34% to support the investment required for Viksit Bharat.
“We need to augment and seek additional resources. Equally, public finance must seek to crowd in private capital,” Singh said.
He also called for improvements in the incremental capital-output ratio (ICOR), which he said had declined from around 5 to 4.5.
Singh noted that states collectively account for roughly 28% and said the 16th Finance Commission has projected general government debt at 73.1% by 2030-31, compared with 84% currently.
He described the debt trajectory as “somewhat daunting” and recommended conducting state-wise debt sustainability assessments to strengthen fiscal discipline.
Singh suggests expanding GST ambit
Singh proposed that the Reserve Bank of India or the Ministry of Finance, with support from the Comptroller and Auditor General, undertake independent assessments of state-level debt sustainability.
He said such assessments could establish specific thresholds for individual states and outline sustainable fiscal paths.
Singh also said both the Centre and states could expand their fiscal space by increasing revenues. He suggested that the GST Council consider broadening the GST framework and, at an appropriate time, bringing electricity, aviation turbine fuel and eventually real estate under the tax regime.