**Executive Summary**
The document is a response to Lok Sabha Unstarred Question No. 413, answered on February 2, 2026, concerning the development of debt markets for infrastructure financing in India. It outlines steps taken and planned by the Government to strengthen debt markets, enhance infrastructure financing, and the role of NaBFID. Key measures include incentivizing public debt issues, easing compliance, and facilitating ESG debt securities.
**Key Points / Main Content**
* **Strengthening Debt Markets and Infrastructure Financing:**
* Targeted incentives for specific investor categories (women, senior citizens, armed forces, retail investors) in public debt issues.
* Easing compliance requirements for debt issuers, including high-value listed debt entities and digital dissemination of annual reports.
* Refining the Electronic Book Provider (EBP) framework to enhance transparency, efficiency, and price discovery.
* Establishment of frameworks for Environmental, Social and Governance (ESG) debt securities.
* Streamlining regulatory norms to facilitate wider investor participation and strengthen InvITs for asset monetization and capital recycling.
* **Role and Progress of NaBFID:**
* NaBFID has financial and developmental objectives under its Act.
* Sanctioned ~₹3.03 lakh crore and disbursed ~₹1.09 lakh crore across core infrastructure and social/commercial sectors as of 31 December 2025.
* Launched a Partial Credit Enhancement (PCE) product and PPP transaction advisory services.
* Established a GIFT City investment arm and expanded urban infrastructure financing.
* Strengthened MDB partnerships and engaged with State Governments on asset monetization with NaBFID as an anchor investor.
* **Ongoing Policy and Regulatory Measures:**
* Strengthening project bankability, deepening capital markets, and de-risking long-term investors.
* Targeted support for Public-Private Partnerships through Viability Gap Funding.
* Enabling frameworks for Infrastructure Investment Trusts (InvITs), Real Estate Investment Trusts (REITs), and Infrastructure Debt Fund–Non-Banking Financial Companies (IDF-NBFCs).
* Strengthening long-tenor financing through National Investment and Infrastructure Fund (NIIF) and NaBFID.
* Deploying PCE mechanisms to de-risk infrastructure bond issuances.
**Impact Analysis**
**Stakeholder:** Investors (Women, Senior Citizens, Armed Forces, Retail Investors)
* **Impact:** Enhanced investment opportunities in public debt issues through targeted incentives.
* **Action Required:** Review investment strategies to capitalize on new incentives.
**Stakeholder:** Debt Issuers (High-Value Listed Debt Entities)
* **Impact:** Reduced compliance burden through rationalized requirements and digital dissemination of annual reports.
* **Action Required:** Adapt to the new compliance norms and adopt digital dissemination practices.
**Stakeholder:** Project Developers
* **Impact:** Improved project bankability through Viability Gap Funding and access to financing through InvITs, REITs, and IDF-NBFCs.
* **Action Required:** Explore opportunities for Public-Private Partnerships and utilize available financing instruments.
**Stakeholder:** State Governments
* **Impact:** Opportunities for asset monetization and capital recycling through engagement with NaBFID.
* **Action Required:** Collaborate with NaBFID to identify and implement asset monetization strategies.
Key Entities Referenced
National Bank for Financing Infrastructure and Development (NaBFID): A development finance institution (DFI) established to support infrastructure financing in India.
Infrastructure Investment Trusts (InvITs): A collective investment scheme similar to a mutual fund, which enables direct investment of money from individual and institutional investors in infrastructure projects.
Ministry of Finance: The Indian government ministry responsible for the country's finances.
Public-Private Partnerships: A contractual agreement between a public agency and a private sector entity to deliver a project or service.
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF ECONOMIC AFFAIRS
LOK SABHA
UNSTARRED QUESTION NO. 413
Answered on Monday, February 02, 2026 / Magha 13, 1947 (Saka)
Development of Debt Markets for Infrastructure Financing
413. Shri Rao Rajendra Singh:
Will the Minister of FINANCE be pleased to state:
(a) the steps taken/being taken by the Government to strengthen India's debt markets
and enhance their role in meeting long-term infrastructure financing needs;
(b) the goals envisaged while establishing National Bank for Financing Infrastructure
and Development (NaBFID) and the progress made in achieving the same;
(c) whether the Government proposes to introduce policy or regulatory measures to
facilitate a more market-driven and diversified ecosystem for infrastructure financing;
and
(d) if so, the details thereof?
ANSWER
MINISTER OF STATE IN THE MINISTRY OF FINANCE
(SHRI PANKAJ CHAUDHARY)
(a) The Government has taken a range of measures to deepen India’s debt markets
and strengthen their role in long-term infrastructure financing, including enabling
targeted incentives in public debt issues for specified investor categories (such as
women, senior citizens, armed forces personnel and retail investors), easing
compliance requirements for debt issuers (including rationalising requirements
applicable to high-value listed debt entities and enabling digital dissemination of
annual reports), and refining the Electronic Book Provider (EBP) framework to
improve transparency, efficiency and price discovery in private placements.
Frameworks have also been put in place for Environmental, Social and
Governance (ESG) debt securities (green, social, sustainability and sustainability-
linked bonds) to expand avenues for financing eligible green and social
infrastructure. Measures for streamlining regulatory norms and facilitating wider
investor participation have also been taken to strengthen InvITs for asset
monetisation and capital recycling.(b) NaBFID has both financial and developmental objectives under its Act. As on 31
December 2025, it has accorded cumulative sanctions of ~₹3.03 lakh crore and
cumulative disbursements of ~₹1.09 lakh crore across core infrastructure and
social/commercial sectors, and has advanced its developmental mandate through
the launch of a Partial Credit Enhancement (PCE) product to widen the investor
base, PPP transaction advisory to build a bankable pipeline, setting up of a GIFT
City investment arm to crowd-in foreign capital, expansion of urban infrastructure
financing (including ₹520 crore investment in municipal bonds), strengthened MDB
partnerships, and engagement with State Governments on asset monetisation with
NaBFID as an anchor investor in proposed InvITs.
(c) & (d) The Government is taking policy and regulatory measures on an ongoing
basis to enable a more market-driven and diversified infrastructure financing
ecosystem by strengthening project bankability, deepening capital markets, and
de-risking long-term investors. This includes targeted support for Public-Private
Partnerships through Viability Gap Funding, enabling frameworks for market-
based instruments such as Infrastructure Investment Trusts (InvITs), Real Estate
Investment Trusts (REITs) and Infrastructure Debt Fund–Non-Banking Financial
Companies (IDF-NBFCs), strengthening long-tenor financing through National
Investment and Infrastructure Fund (NIIF) and NaBFID, and deploying PCE
mechanisms to de-risk infrastructure bond issuances and broaden participation in
domestic debt markets.
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