Major Infrastructure Push In Budget 2025: Rs 1.5 Lakh Crore Interest-Free Loans To States, Rs 10 Lakh Crore Asset Mobilisation Plan

In a significant move to accelerate infrastructure development, Union Finance Minister Nirmala Sitharaman has announced an outlay of Rs 1.5 lakh crore in 50-year interest-free loans to states.

This initiative, unveiled during the Union Budget 2025 presentation, is aimed at catalysing capital expenditure and reinforcing core infrastructure across the country.

Sitharaman also mentioned the government's focus on economic growth with energetic public investment and introduced an Urban Challenge Fund of Rs 1 lakh crore, which will transform cities into growth nodes while developing creative development with water and sanitation infrastructure.

The fund would trigger innovative urban projects with competitive and sustainable development models by nudging states into adopting them.

Each ministry is going to bring in a three-year pipeline of PPP infrastructure projects, and the Second Asset Monetisation Plan (2025-30) has been unveiled to fuel this momentum, which is targeting the mobilisation of Rs 10 lakh crore.

The funds will be reinvested into new projects, keeping the cycle of infrastructure expansion intact.

Furthermore, the government promises to provide a share of financing up to 25 percent on bankable projects, with rest to be made available from bond, banking entities, and through PPP models.

Read More: FM Sitharaman Announces Indirect Tax Measures In Budget 2025 To Bolster Domestic Manufacturing