States need to improve project preparation, boost private investment, says CEA Nageswaran

States need to strengthen capital expenditure, improve project preparation and create an environment that encourages private investment as India works towards its Viksit Bharat 2047 goal, Chief Economic Adviser V Anantha Nageswaran said, Moneycontrol reported.

Speaking at the conclusion of a two-day conference on Financing India’s Journey towards Viksit Bharat in New Delhi, Nageswaran said India faces the dual challenge of sustaining its long-term development journey towards 2047 while accelerating resource mobilisation over the next five years, when global financing opportunities are expected to remain available.

Nageswaran highlighted the need for states to focus on creating conditions that can attract greater private investment. This would include addressing issues related to land, power, logistics and clearances, which can influence the pace and viability of investment projects.

He also stressed the importance of better project preparation. According to Moneycontrol, Nageswaran said states should develop credible project reports and project pipelines so that projects become more attractive to domestic and international financial institutions.

Referring to the Viksit Bharat initiative, he said the journey towards the 2047 development target would depend significantly on the role played by states. He emphasised the need for states to translate policy reforms and recommendations into partnerships with clear responsibilities and timelines.

Nageswaran also called for greater attention to directing credit towards underserved districts that have growth potential. Improving access to financing in such regions, he said, could help broaden the benefits of economic development.

States urged to raise capital expenditure

The conference also discussed ways to strengthen state-level public investment. Sudhir Shrivastava, former Additional Chief Secretary of Maharashtra, proposed increasing the capital outlay of states from the current 2.4% of gross state domestic product (GSDP) to 3% by 2031-32.

The proposal was discussed in the context of strengthening public investment by state governments and improving their ability to support infrastructure and development projects.

Financing requirements for agricultural transformation and the energy transition were also among the key themes discussed at the conference.

The energy-related discussions covered renewable energy, transmission infrastructure, battery storage, pumped-storage projects, carbon capture and carbon-credit frameworks. The conference also examined financing needs associated with transforming the agriculture sector, according to Moneycontrol.

Working groups comprising representatives from states are expected to take forward the discussions and identify sector-specific financing requirements, along with actionable recommendations.

The two-day conference brought together state finance ministers and finance secretaries, as well as representatives from academia, industry, banking and the policymaking community. Discussions focused on financing requirements for India’s development and the mobilisation of resources needed to support long-term growth.