Economic Survey 2025-26: Need to improve India’s PPP frameworks

Shifting Gears in India's Infrastructure Partnerships

India's latest Economic Survey for 2025-26, tabled in Parliament, spotlights a critical need to revamp the country's Public-Private Partnership (PPP) models. These partnerships, once hailed as game-changers for building roads, ports, and urban transit, now face calls for deeper evolution. The survey argues that the current approach, too focused on individual deals, must pivot to creating robust market systems that attract long-term private investment. At the heart of this shift is tackling structural uncertainties like land acquisition delays, regulatory clearances, and demand forecasts that have plagued projects in the past.

By emphasizing system-level reforms, the government aims to make PPPs genuine collaborations rather than mere contracts. This means public authorities stepping up to handle early risks that private players can't easily price, such as initial site preparations. Success stories in highways and ports show promise, but states and cities lag behind due to weak institutional setups and misunderstandings about risk-sharing. Professionalizing dedicated PPP cells and using data-driven platforms for monitoring could bridge these gaps, ensuring projects deliver over their 30-60 year lifespans.

Key Challenges and Successes in PPP Implementation

While central-level PPPs have matured in sectors like shipping and roads, sub-national levels grapple with trust issues and uneven capacities. Urban local bodies, handling growing infrastructure demands, often blur lines between PPPs and simpler construction contracts, leading to suboptimal outcomes. The survey points out that poor communication around renegotiations erodes public confidence and scares off investors willing to commit for decades.

On the brighter side, ports have seen PPP awards jump from 37 projects in FY15 to 87 in FY25, with values soaring to over Rs 61,000 crore, boosting capacity by 660 million tonnes annually. Roads boast a new PPP pipeline of 13,400 km worth Rs 8.3 trillion, while initiatives like PM e-Bus Sewa deploy 10,000 electric buses through PPPs with strong financial safeguards. Railways have completed 18 PPP projects worth Rs 16,636 crore, with more underway. Capital spending on highways has multiplied nearly sixfold since 2014-15, signaling momentum.

"PPPs must increasingly reflect the third 'P' — Partnership — where public and private actors co-design projects, share early-stage risks, and align incentives around long-term service outcomes rather than narrow financial closure," the Economic Survey states.

These wins underscore how PPPs enhance productivity and sustainability, aligning with goals like decarbonization and digital infrastructure. Yet, the survey warns that without addressing perceptions of PPPs as quick asset sales, investor hesitancy will persist.

Roadmap for a Resilient PPP Future

Looking ahead, the survey lays out a clear roadmap: clearer multi-year project pipelines, better integration with national programs, and structured renegotiation frameworks to prevent project failures. It advocates treating PPPs as evolving assets, not rigid one-time deals, to adapt to changes over decades. States must build capacity through programmatic strategies, ditching ad-hoc trials for scalable models.

This evolution extends infrastructure's definition beyond roads and bridges to digital systems, clean energy, and resilient water networks. By maintaining investment drive and private involvement, India can cement infrastructure as a growth pillar, supporting its vision for medium-term economic expansion. Private investment, though growing, needs policy stability like predictable taxes to fully engage.

In summary, the Economic Survey 2025-26 urges a mature PPP ecosystem that minimizes uncertainties, fosters partnerships, and leverages past lessons for nationwide infrastructure leaps. Strengthening these frameworks promises to unlock private capital, ensuring sustainable development for cities and states alike.