CII proposes sovereign finance platform for long-term growth

The Confederation of Indian Industry (CII) has proposed the creation of a government-backed financing platform that could help Asia’s second-largest economy achieve its long-term growth targets.

The proposed India Development and Strategic Fund (IDSF), a professionally managed institution, will mobilize patient, long-term capital to enhance India’s domestic productive capacity while securing critical economic interests abroad.

“India is entering a decisive window of opportunity. We are already among the world’s largest economies, but to achieve advanced economy status by 2047, we need structural, sustained long-term capital resources that extend beyond the annual budget cycle,” CII director general Chandrajit Banerjee said.
The proposal recognizes that India’s growth targets in infrastructure, energy transition, manufacturing, technology and human development require much more financing than annual budget allocations can provide. IDSF will help mobilize local and global savings and transform national capital from mature assets into new productive capacity.

“This is not about more borrowing. This is about better capital structuring, transforming our current national strength into future assets rather than one-time financial use,” Banerjee said.

The fund will have two coordinated arms: the developmental investment arm and the strategic investment arm. The first arm will focus on financing long-term domestic priorities such as infrastructure, clean energy, logistics, industrial corridors, MSME growth, education, health and urban development. The industry body has suggested that the National Investment and Infrastructure Fund (NIIF) be included in this arm. The second arm, on the other hand, will focus on acquiring overseas assets vital to India’s economic and security interests, including energy fields, critical minerals, semiconductors and advanced technologies such as artificial intelligence. “In a world where energy, minerals, technology and logistics are increasingly securitized, economic and strategic policy are now part of the same continuum,” Banerjee said. he said.

The industry body has sought an IDSF Bill defining the Fund’s powers, capital sources, withdrawal norms and disclosure rules. While the government will retain majority ownership and strategic control, the Fund will be managed by a professional board consisting of senior government representatives and global investment experts.

CII estimates that IDSF could create a $1.3-2.6 trillion managed corpus by 2047, comparable in ambition and credibility to the world’s leading independent investors.

The activation roadmap involves an initial budget allocation to build credibility, followed by systematically channeling revenues from the monetization of assets from roads, transmission lines, ports and spectrum into the Fund, rather than using them solely to reduce the budget deficit. Over time, some of the government’s equity capital in selected public sector enterprises could be transferred to the Fund and these funds could be converted into strategic vehicles for India’s global expansion rather than being disinvested.

The fund may also issue infrastructure, green and diaspora bonds to attract long-term domestic and international savings, co-invest with multilateral and bilateral partners and, over time, use a small portion of India’s foreign exchange reserves for strategic overseas acquisitions in areas such as critical minerals and energy.