Finance Minister Nirmala Sitharaman on Wednesday, 12 August said that BRICS economies are major engines of global economic growth, but cautioned that member nations share deep structural constraints in mobilising private capital at scale. She made the remarks in her keynote address at a seminar on 'The Role of the New Development Bank in Mobilising Private Capital in Member Countries', held in Jaipur on the sidelines of the BRICS Finance Ministers' and Central Bank Governors Meeting — hosted under India's chairship.

The Core Challenge: Confidence, Not Capital

Sitharaman argued that the fundamental problem is not a shortage of capital but an absence of the conditions needed to deploy it. 'The challenge is not merely the availability of capital, but the creation of confidence, stability, predictability, and credible long-term frameworks which are essential to unlock sustained private participation across member countries,' she said.

She underscored the pivotal role that multilateral development banks play in de-risking investments, improving project bankability, and reinforcing investor confidence — prerequisites, she said, for mobilising private capital at any meaningful scale.

India's Infrastructure Push as a Template

Drawing on India's own experience, the Finance Minister pointed to sustained public capital expenditure and structural reforms as the foundation of the country's infrastructure build-out. Public investment has expanded significantly over the past decade, she noted, creating productive national assets across highways, railways, ports, logistics systems, digital infrastructure, and energy networks.

Sitharaman was emphatic that public capital must act as a catalyst — not a substitute — for private investment. To operationalise this principle, the government has deployed several instruments: Viability Gap Funding (VGF) for socially desirable but financially constrained projects; the Hybrid Annuity Model (HAM) for balanced risk-sharing in road infrastructure; and credit enhancement mechanisms to improve project bankability. The establishment of Infrastructure Investment Trusts (InvITs) has further helped recycle capital and draw in long-term institutional investors.

Union Budget 2026-27 Measures

Building on this foundation, Sitharaman informed the gathering that the Union Budget 2026-27 introduced targeted measures to accelerate private sector participation. These include new dedicated rail freight corridors, new high-speed rail corridors, operationalisation of new National Waterways, and a coastal cargo promotion scheme.

What Other Officials Said

Anuradha Thakur, Secretary of the Department of Economic Affairs, echoed the Finance Minister's framing in her welcome address, stating that capital mobilisation cannot rest on favourable conditions alone. 'It must be anchored in frameworks that endure,' she said, adding that multilateral collaboration is best placed to strengthen such frameworks over the long term.

The seminar brought together senior policymakers, representatives of multilateral institutions, and private-sector leaders, and was followed by a panel discussion featuring delegates from BRICS nations, financial institutions, think tanks, and academia. How BRICS members translate these frameworks into binding commitments will determine whether the bloc can close its infrastructure financing gap in the years ahead.