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Sound assets, contract and policy certainty, and fair pricing key to attracting patient capital
Chennai, 3 August 2026: “India’s infrastructure financing requirements are far beyond what government budgets can carry, making long-term private capital indispensable to building assets that can support the country’s economic growth over the next two to three decades. The Union Government’s capital expenditure had increased from around ₹2.5 lakh crore seven to eight years ago to over ₹12 lakh crore in the current Budget. Including grants that created assets in the States, the effective figure was close to ₹17 lakh crore”, said Dr Anantha Nageswaran, Chief Economic Advisor, Government of India, at the CII organized Tamil Nadu Infrastructure Summit 2026 held in Chennai today.
Highlighting the role played by public investment in strengthening India’s economic resilience, Dr Nageswaran said Investment in roads, railways, ports, power infrastructure and digital networks had supported economic activity when private investment hesitated and exports faced headwinds, while also expanding the economy’s productive capacity. Public capital had not crowded out private investment but had helped crowd it in.
“The next phase of infrastructure creation, however, would require private capital, particularly patient capital capable of earning steady returns over 20 to 30 years. Such capital would not enter merely because it was invited or provided a guarantee; it would follow projects whose underlying assets and returns were sound,” he observed.
“Free is the most expensive word in public policy,” he cautioned, pointing out that somebody ultimately paid the cost, either the user through a fair charge, the taxpayer through a hidden subsidy or the asset itself through deterioration caused by inadequate maintenance. Placing water security at the centre of India’s infrastructure agenda, Dr Nageswaran said climate volatility had made it possible for the same State to experience floods and droughts within a single year. Water therefore had to be treated with the same seriousness accorded to roads, ports and power infrastructure.
Despite an increasingly difficult global environment marked by geopolitical conflict, tariff uncertainty, volatile energy prices and pressure on currencies, India had demonstrated considerable economic resilience. The economy had grown by 7.7 per cent in the previous financial year, while manufacturing expanded by more than 10 per cent, Dr Nageswaran noted.
Mr P Ravichandran, Chairman, CII Southern Region and President, Danfoss India, highlighted significant capital was available for investment, but the scale and number of bankable infrastructure projects remained inadequate. Infrastructure projects have to be planned around viable revenue and cash-flow models rather than Detailed Project Reports prepared primarily to secure budgetary allocations. Developing projects at a Southern Region scale could improve their commercial viability, particularly in areas such as renewable energy, logistics, ports and multimodal connectivity.
“Future-ready infrastructure would have to be integrated, resilient, sustainable and technology-enabled. Tamil Nadu’s next growth gateway need not be confined to one project or location but could comprise a connected network of economic centres. Chennai could be a global business and aviation gateway, Hosur as an advanced manufacturing centre, Coimbatore and Tirupur as engineering and innovation hubs, Tiruchirappalli and Madurai as regional knowledge economies, and Thoothukudi as a port, logistics and renewable-energy gateway,” said Mr M V Satish, Advisor to Chairman & Managing Director, Larsen & Toubro Ltd.
Outlining Tamil Nadu’s infrastructure priorities, Mr C Devarajan, Chairman, CII Tamil Nadu and Managing Director, URC Construction (P) Ltd, called for a connectivity reset linking Chennai, Coimbatore, Hosur, Madurai and Thoothukudi as complementary economic and industrial centres rather than treating them as isolated locations while Mr Mohan Ramanathan, Convenor, TN Infrastructure Panel and Managing Director, Advanced Construction Technologies P Ltd, emphasised that infrastructure was central to economic competitiveness, logistical efficiency, investment attractiveness, employment generation, urban quality of life and climate resilience.
“Every bridge, building, highway, port, railway, Metro and water project had to serve future generations with safety, sustainability and resilience. Quality could not be compromised, while innovation and integrity had to remain central to infrastructure development,” he stressed.
Mr J Murugavel, Vice Chairman, CII Tamil Nadu and Founder & CEO, Matrimony.com Ltd delivered the concluding remarks of the plenary session.
