New Delhi, Dec. 29 -- India's infrastructure sector may soon get a Rs.25,000 crore safety net, as the Union Budget for FY26 could unveil a risk guarantee fund designed to ease financing bottlenecks and attract capital to stalled projects. The move comes amid rising project delays, cost overruns, and higher borrowing costs that have long constrained investment flows into the sector.

Modelled on credit guarantee schemes for small businesses, the fund, likely managed by the National Credit Guarantee Trustee Company (NCGTC), would underwrite development risks for infrastructure projects, allowing banks and financial institutions to lend on easier terms, said two government officials aware of the development. The proposal was submitted to the...