---
title: "India's Public Capital to Spur, Not Replace, Private Investment: FM Sitharaman"
url: https://projectchintan.com/article/india-public-capital-catalyst-private-investment-hn2sh
publisher: Project Chintan
author: Project Chintan Newsroom
section: Business
published: 2026-08-12T15:30:23.297Z
modified: 2026-08-12T18:30:07.184Z
language: en-IN
---

# India's Public Capital to Spur, Not Replace, Private Investment: FM Sitharaman

India's Finance Minister Nirmala Sitharaman stated public capital should catalyze private investment, not substitute it. She highlighted measures like viability gap funding and PM Gati Shakti to encourage private sector participation at a BRICS meeting in Jaipur.

## Key takeaways

- Public capital is intended to act as a catalyst, not a substitute, for private investment in India.
- Finance Minister Nirmala Sitharaman highlighted policy measures such as VGF, HAM, InvITs, NIP, and PM Gati Shakti to encourage private sector involvement.
- These measures aim to improve project bankability, provide long-term visibility, and foster confidence and stability for investors.
- Sitharaman spoke at a BRICS meeting in Jaipur, emphasizing the need for collective action and practical cooperation among member countries for sustainable growth.

Union Finance Minister Nirmala Sitharaman articulated India's strategy that public capital should serve as a catalyst for private investment, rather than a replacement. Speaking at a seminar on mobilizing private capital for member countries during the BRICS Finance Ministers' and Central Bank Governors' meeting in Jaipur, Sitharaman emphasized the importance of confidence, policy stability, and predictable long-term frameworks to attract sustained private participation.

## What Happened

Sitharaman delivered a keynote address at a seminar focused on the New Development Bank's role in mobilizing private capital within BRICS nations. She also delivered the inaugural address for the first BRICS Finance Ministers and Central Bank Governors' meeting under India's 2026 chairship. The finance minister outlined India's approach to leveraging public funds to stimulate private sector involvement in infrastructure and other key areas.

## Key Facts

- Union finance minister Nirmala Sitharaman stated that public capital must act as a catalyst, not a substitute for private investment.

- Sitharaman made these remarks on Wednesday at a seminar in Jaipur, on the sidelines of the BRICS Finance Ministers’ and Central Bank Governors’ meeting.

- She cited policy measures designed to support this principle, including viability gap funding (VGF), the hybrid annuity model (HAM), infrastructure investment trusts (InvITs), the National Infrastructure Pipeline (NIP), and PM Gati Shakti.

- VGF is used to support socially desirable projects facing financial constraints.

- HAM aims for balanced risk-sharing in road infrastructure projects.

- Credit enhancement mechanisms are employed to improve project bankability.

- InvITs facilitate capital recycling and attract long-term institutional investors.

- The NIP offers investors long-term visibility.

- PM Gati Shakti is focused on improving coordination and efficiency for multimodal connectivity.

- The Union Budget 2026-27 introduced targeted measures for private sector investment, such as new dedicated freight corridors, high-speed rail corridors, national waterways, and a coastal cargo promotion scheme.

- Sitharaman noted that BRICS economies face common structural constraints in mobilizing private capital at scale.

- She emphasized that confidence, stability, predictability, and credible long-term frameworks are essential for unlocking sustained private participation.

- India's BRICS 2026 chairship theme is “Building Resilience and Innovation for Cooperation and Sustainability”.

- Sitharaman stressed the need for BRICS members to cooperate for resilient, inclusive, and sustainable growth, translating cooperation into practical finance track outcomes.

## Background

The BRICS Finance Ministers' and Central Bank Governors' meeting in Jaipur was held during India's 2026 chairship of BRICS. This gathering is part of ongoing efforts by the economic bloc to address financial cooperation and economic development among member nations. The focus on mobilizing private capital is critical for funding large-scale infrastructure and development projects necessary for sustainable growth.

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