Financing India's Journey towards Viksit Bharat: States, Centre and Experts Discuss Savings, Private Capital, Agriculture and Energy Transition

Why is the Conference in News?

The two-day Conference on 'Financing India's Journey towards Viksit Bharat' concluded in New Delhi on 19 September 2026.

The Ministry of Finance described it as a first-of-its-kind conference bringing together States, the Union Government and experts from academia, industry, banking and policymaking to discuss India's long-term financing requirements.

What Was the Main Question?

The central question was how India can mobilise enough finance to support sustained, inclusive and broad-based development over the coming decades.

Economic development requires investment in infrastructure, manufacturing, agriculture, energy, human capital, technology and public services. The scale of such investment means that financing becomes as important as identifying the projects themselves.

Who Participated?

The conference included the Union Minister for Finance and Corporate Affairs, Chief Ministers, Deputy Chief Ministers, Finance Ministers and senior officials from States and Union Territories, along with representatives and experts from academia, industry, banking and policymaking.

The broad participation reflected the fact that development finance is not exclusively a Union Government responsibility. States make substantial investments in infrastructure, health, education and other public services.

Day One: Macroeconomic Priorities

The first day focused on macroeconomic priorities, savings, investment and fiscal resilience.

These concepts are closely connected. Domestic savings provide an important source of funds for investment, while fiscal resilience determines the ability of governments to finance development without creating unsustainable debt pressures.

Q1 FY 2026-27 GDP Growth

During the conference, former Fifteenth Finance Commission Chairman N. K. Singh referred to India's 7.8 percent GDP growth in the first quarter of FY 2026-27.

GDP growth measures the change in the value of goods and services produced in an economy after applying the relevant statistical methodology.

India's Gross Domestic Savings Rate

N. K. Singh stated at the conference that India's gross domestic savings rate was around 34 percent of GDP.

He suggested that it would need to move towards 38-40 percent to sustain growth in the range of 7-8 percent required for the long-term development objective.

This 38-40 percent figure should be understood as a view expressed by the speaker at the conference, not as a new statutory or official government target announced through the PIB release.

What is Gross Domestic Saving?

Gross domestic saving broadly represents the portion of national income that is not used for current consumption.

Domestic savings can originate from households, private corporations and the public sector.

These savings are important because they can help finance investment within the economy.

Savings and Investment

Saving and investment are related but distinct concepts.

Saving represents income not currently consumed, while investment generally involves creation or acquisition of productive assets that can expand future economic capacity.

A country with large investment requirements needs adequate financing from domestic savings, foreign capital or a combination of both.

Why Does Investment Matter?

Investment in roads, railways, ports, power systems, factories, digital networks, irrigation, education and technology can expand productive capacity.

However, the quality of investment is as important as its quantity. Poorly designed projects can lock resources into assets that produce inadequate economic or social returns.

Government Budgets Alone Are Not Enough

Department of Economic Affairs Secretary Anuradha Thakur emphasised that the scale of transformation required for the long-term development journey could not be met by government budgets alone.

The conference therefore examined private-sector financing, innovative financing mechanisms and cooperation across different levels of government.

Why Private Capital Matters

Government resources are finite and must support many competing priorities.

Private investment can supplement public investment in sectors where commercially viable projects can attract capital.

Public resources can also play a catalytic role by reducing certain risks or supporting infrastructure that encourages additional private investment.

What is Catalytic Public Finance?

Catalytic public finance refers to the strategic use of public resources to mobilise larger amounts of additional investment.

Instead of the government financing every project entirely from its own budget, public funds can sometimes be used to improve project viability, provide guarantees, create infrastructure or attract private and institutional capital.

Fiscal Resilience

Fiscal resilience refers to the ability of public finances to withstand economic shocks while continuing to support essential expenditure and development priorities.

High and poorly managed debt can reduce fiscal space because a larger share of government revenue may need to be used for interest payments.

State-Level Debt Sustainability

N. K. Singh advocated State-wise debt-sustainability assessments during the conference.

Debt sustainability concerns whether a government can service its existing and future debt obligations without requiring unrealistic fiscal adjustment or creating instability.

Off-Budget Borrowing

The conference discussion also highlighted the importance of fiscal transparency concerning off-budget borrowings.

Off-budget borrowing generally refers to financing undertaken outside the conventional budgetary borrowing presentation but for which the public sector may ultimately bear financial responsibility.

Ignoring such obligations can provide an incomplete picture of fiscal health.

Government Guarantees

A government guarantee is a commitment under which the government may become responsible for an obligation if the original borrower fails to meet it.

Guarantees may not immediately appear as conventional expenditure, but they can create contingent liabilities and therefore matter for fiscal-risk assessment.

Arrears

Arrears are obligations that have become due but remain unpaid.

Large arrears can obscure the true fiscal position because postponing payment does not eliminate the underlying liability.

State-Owned Entities and Fiscal Risk

Borrowings undertaken by State-owned entities can also create fiscal risks, particularly when repayment ultimately depends on government support.

Comprehensive fiscal analysis therefore examines direct debt as well as guarantees, contingent liabilities and relevant public-enterprise obligations.

Revenue Mobilisation through Technology

N. K. Singh argued that better use of information may provide opportunities to improve revenue mobilisation without relying only on higher tax rates.

He referred to artificial intelligence and machine learning combined with existing tax databases as possible tools for identifying compliance gaps and broadening the effective tax base.

Tax Rate versus Tax Base

A tax rate determines the proportion or amount of tax applied to a taxable item or income.

The tax base is the underlying amount, activity, income or transaction on which tax is imposed.

Revenue can sometimes be improved by strengthening compliance and broadening the effective tax base rather than simply increasing tax rates.

Role of Predictable Rules

The conference discussion highlighted predictable rules, enforceable contracts and faster dispute resolution as important conditions for investment.

Investors assess not only potential returns but also legal certainty, administrative efficiency and the risk that contractual disputes will remain unresolved for long periods.

Factor Markets

Capital, labour and land were identified during the conference as important factor-market areas.

Factor markets allocate inputs used in production. Improving their functioning can influence productivity, investment and economic growth.

Labour Productivity

Labour productivity broadly measures output produced per unit of labour input.

Skills, technology, capital equipment, health, education and management practices can all influence productivity.

The conference highlighted skilling, apprenticeships and stronger university-industry linkages in this context.

Digital Land Records

States were encouraged in the conference discussion to improve land-use efficiency, streamline approvals and strengthen digital land records.

Clear land records can reduce uncertainty, support transactions and improve the implementation of infrastructure and investment projects.

Financing Agricultural Transformation

Day Two included a dedicated session on financing transformation of the agriculture sector.

The discussion covered market access, reliable agricultural finance, post-harvest marketing, logistics, infrastructure and food processing.

Why Agricultural Finance Matters

Agriculture requires finance not only for seeds and fertilisers but also for irrigation, machinery, storage, processing, logistics and market access.

Investment beyond the farm gate can reduce losses and improve the value realised from agricultural production.

Post-Harvest Infrastructure

Post-harvest infrastructure includes storage, warehouses, cold chains, transportation, processing and market facilities.

Weak post-harvest systems can reduce farmer income even when agricultural production is high.

IFAD

The International Fund for Agricultural Development participated in the agricultural-financing session.

IFAD is an international financial institution and a specialised agency of the United Nations focused on rural poverty reduction and agricultural development.

Financing the Energy Transition

Another major Day Two session focused on financing India's energy transition.

Energy transition requires substantial capital because renewable generation must be accompanied by transmission networks, storage, grid modernisation and emerging low-carbon technologies.

Renewable Energy and Transmission

Building renewable generation alone is not sufficient if electricity cannot be transmitted from areas of production to centres of demand.

Investment in transmission assets is therefore a fundamental part of renewable-energy expansion.

Battery Energy Storage Systems

The conference discussed financing of Battery Energy Storage Systems, commonly abbreviated as BESS.

Batteries can store electricity when generation is abundant and release it when required, helping electricity systems manage variable renewable sources such as solar and wind.

Pumped Storage Projects

Pumped Storage Projects, or PSPs, are another form of energy storage.

They typically use electricity to pump water to a higher reservoir when power is available and later release the water through turbines to generate electricity when required.

BESS versus PSP

BESS stores energy electrochemically in batteries, while pumped storage generally stores potential energy by moving water between reservoirs at different elevations.

Both can provide flexibility to power systems, but their technical characteristics, locations, costs and operating durations differ.

CCUS

The energy-transition session also considered Carbon Capture, Utilization and Storage, or CCUS.

CCUS refers to technologies that capture carbon dioxide from relevant emission sources, after which the captured carbon can be utilised or stored to prevent its release into the atmosphere.

Carbon Credits

The conference also considered design of a carbon-credit framework in the context of India's Nationally Determined Contribution targets.

A carbon credit generally represents a quantified unit associated with reduction, avoidance or removal of greenhouse-gas emissions under an applicable framework.

What is an NDC?

NDC stands for Nationally Determined Contribution.

Under the Paris Agreement, countries communicate their climate-action commitments through NDCs.

India's energy-transition financing therefore has both domestic-development and international climate-policy dimensions.

Technology and Viksit Bharat

A special session examined the role of new-age technology in India's development journey.

Digital technology can influence productivity, public-service delivery, financial inclusion, manufacturing, taxation and the efficiency of infrastructure.

GSDP Perspective

The Ministry of Statistics and Programme Implementation presented a special session on measuring the development journey through a Gross State Domestic Product perspective.

GSDP is the State-level counterpart of GDP and measures economic activity within a State according to the applicable national-accounting framework.

GDP versus GSDP

Gross Domestic Product measures economic production for the country as a whole.

Gross State Domestic Product measures economic production within an individual State.

Comparing State economies requires care because population size, prices, economic structure and development levels differ significantly.

Role of the Chief Economic Adviser

Chief Economic Adviser V. Anantha Nageswaran addressed the concluding session.

He emphasised that significantly greater participation by private capital would be necessary to mobilise the investment required over India's long-term development journey.

Three Priorities for States

The Chief Economic Adviser outlined three broad priorities for States.

First, States should create an enabling environment for private investment through land, power, logistics and effective single-window clearances.

Second, they should improve the quality of investment through strong project-preparation pipelines and credible project reports while facilitating finance for underserved districts with growth potential.

Third, States should strengthen their own capital expenditure despite fiscal constraints.

What is Capital Expenditure?

Capital expenditure is government spending that generally creates assets or has a durable impact on productive capacity.

Examples can include expenditure on roads, bridges, railways, irrigation and other infrastructure.

It differs conceptually from many forms of recurring revenue expenditure.

State Capital Outlay

During the conference, the Chief Economic Adviser referred to a proposal presented by former Maharashtra Additional Chief Secretary Sudhir Shrivastava to raise capital outlay from approximately 2.4 percent to 3 percent of GSDP by 2031-32.

This should be understood as a proposal discussed at the conference rather than automatically interpreted as a binding nationwide target.

Project Preparation

Availability of money does not automatically produce good infrastructure.

Projects require technical feasibility studies, realistic cost estimates, environmental and social assessments, financing plans and credible implementation schedules.

Weak project preparation can delay investment or create cost overruns.

Single-Window Clearance

A single-window system seeks to simplify business approvals by reducing the need for investors to navigate multiple disconnected administrative processes.

Its effectiveness depends on whether the system actually integrates decision-making rather than merely creating another application portal.

Public-Private Complementarity

Public and private finance do not always have to be viewed as substitutes.

Public investment can create infrastructure that improves the viability of private investment, while private capital can supplement limited government resources.

Fiscal Federalism

The participation of Union and State governments makes the conference relevant to fiscal federalism.

Fiscal federalism concerns the division of revenue, expenditure responsibilities, borrowing powers and fiscal transfers across different levels of government.

Finance Commission Connection

The Finance Commission is a constitutional institution under Article 280 of the Constitution of India.

It makes recommendations concerning specified aspects of financial relations between the Union and the States.

The presence of the former Chairman of the Fifteenth Finance Commission makes the broader fiscal-federal context particularly relevant for examination preparation.

Why This Matters for UPSC

The conference connects multiple parts of the UPSC syllabus: economic growth, savings and investment, public finance, fiscal federalism, agriculture, infrastructure, energy transition, climate finance and technology.

It is particularly useful for GS-III and for Economic Development portions of the Preliminary Examination.

Possible Mains Analysis

A strong answer can explain that India's long-term development ambitions require a shift from viewing development finance solely as government expenditure towards a broader financing ecosystem involving public budgets, domestic savings, banks, capital markets, private investors, multilateral institutions and innovative financial mechanisms.

However, greater financing must be accompanied by fiscal transparency, sound project preparation, debt sustainability, predictable regulation and effective Centre-State coordination.

Important Distinction for Exams

The conference contained several recommendations and views expressed by individual speakers. These should not automatically be described as formal Government of India targets.

For example, the suggestion that the domestic savings rate should move towards 38-40 percent and the proposal to raise State capital outlay towards 3 percent of GSDP were views or proposals discussed at the conference.

Important Facts for Competitive Exams

• Conference: Financing India's Journey towards Viksit Bharat.
• Concluded: 19 September 2026.
• Location: New Delhi.
• Organising ministry: Ministry of Finance.
• It was described as a first-of-its-kind conference.
• Day One: macroeconomic priorities, savings, investment and fiscal resilience.
• Day Two: agricultural transformation and energy-transition financing.
• Q1 FY 2026-27 GDP growth referred to at the conference: 7.8 percent.
• Gross domestic savings rate referred to by N. K. Singh: around 34 percent of GDP.
• 38-40 percent savings rate was a suggestion by N. K. Singh, not a new statutory government target.
• Energy topics included BESS, PSP, CCUS and carbon credits.
• Special sessions covered new-age technology and GSDP measurement.
• Chief Economic Adviser: V. Anantha Nageswaran.
• Finance Commission: Article 280 of the Constitution.