Business Desk MUMBAI

Industry lobby CII on Sunday urged the government to establish a professionally managed India Development and Strategic Fund to finance the country's long-term growth, resilience, and secure critical economic interests abroad.

India needs a twin-armed India Development and Strategic Fund to power growth and secure the country’s strategic future, the Confederation of Indian Industry (CII) said. Conceived as a national fund, IDSF would mobilise patient, long-horizon capital to build India's productive capacity at home and secure critical economic interests abroad, it added.

With disciplined design and funding, IDSF could, over the next two decades, build a managed corpus in the range of $1.3 to 2.6 trillion by 2047, comparable in ambition and credibility to the world's leading sovereign investors. The proposed capitalisation roadmap includes a modest initial budgetary allocation to establish credibility, followed by systematic channelling of a share of asset monetisation proceeds, from roads, transmission lines, ports, and spectrum, into the fund instead of one-time deficit reduction.

Over time, a portion of the government's equity in select public sector enterprises could be transferred to the fund, turning these enterprises into instruments for India's global expansion rather than mere disinvestment candidates, it suggested. Once macroeconomic buffers are adequate, a calibrated allocation of a small portion of India's foreign exchange reserves could also be considered for overseas strategic acquisitions in areas like critical minerals and energy.  

“India is entering a decisive window of opportunity. We are already among the world's largest economies, but to reach developed-economy status by 2047 we need structural, perpetual sources of long-term capital that go beyond the annual budget cycle,” PTI reported, quoting Chandrajit Banerjee, Director General, CII. The fund would be a sovereign-anchored, professionally managed instrument that invests in both national capacity and strategic security,” he said.