Leveraging Private Capital for Infrastructure under Fiscal Constraints: A Macroeconomic Perspective

Author(s)	Dr. G. Purushotam
Country	India
Abstract	Developing countries face large infrastructure deficits alongside constrained fiscal space arising from elevated public debt, competing social expenditures, and limited domestic resource mobilisation. This article examines the macroeconomic rationale, opportunities, and risks of mobilising private capital for infrastructure under such constraints, with particular attention to India. Drawing on growth models with public capital, theories of crowding effects, and the economics of public-private partnerships (PPPs), the analysis evaluates conditions under which private financing can expand investment without compromising debt sustainability or inclusive growth.
Keywords	infrastructure finance, public debt, private capital, public-private partnerships, fiscal constraints, India, developing countries
Published In	Volume 8, Issue 4, July-August 2026
Published On	2026-08-19
DOI	https://doi.org/10.36948/ijfmr.2026.v08i04.86144

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