The Union Budget 2025-26 has placed a significant emphasis on infrastructure investment with several key initiatives aimed at boosting capital expenditure and supporting urban development.
Each infrastructure-related ministry will be required to develop a three-year pipeline of Public-Private Partnership (PPP) infrastructure projects to streamline planning and execution. A substantial ₹1.5 lakh crore outlay has been announced for 50-year interest-free loans to states to encourage capital expenditure and incentivize reform implementation.
Additionally, a Second Asset Monetization Plan for 2025-30 will be introduced, aiming to reinvest ₹10 lakh crore of capital from monetized assets into new infrastructure projects. This will help generate resources for future projects while improving asset utilization.
To further urban development, an Urban Challenge Fund of ₹1 lakh crore will be established to support proposals related to ‘Cities as Growth Hubs,’ ‘Creative Redevelopment of Cities,’ and ‘Water and Sanitation.’ This fund will focus on enhancing city infrastructure and addressing critical urban challenges through innovative approaches.
These initiatives reflect the government’s continued focus on expanding infrastructure, supporting urban growth, and driving long-term economic development.
