NITI Aayog proposes higher social discount rate for project appraisal
Economic Times 2 hrs ago·14 Oct 2026, 6:14 pm
NITI Aayog released a working paper proposing to raise the social discount rate used to evaluate public projects to about 9.2% for projects with a life of up to 30 years. The discount rate is a tool that converts future benefits and costs into present‑day terms; a higher rate makes long‑term returns appear smaller.
For investors, the change could shift the economics of large‑scale infrastructure, power and transport schemes that rely on government funding. Projects that were previously deemed viable may now face tighter scrutiny, potentially slowing the pipeline of new contracts for construction firms and related suppliers.
Market participants will be watching how quickly ministries adopt the new rates and whether the government issues further guidance for projects longer than 30 years. Any delay or amendment could influence the timing of future public‑sector spending and the outlook for sectors tied to government investment.
Excerpt from Economic Times
NITI Aayog's working paper suggests increasing the social discount rate to 9.23% for project appraisal up to 30 years. This proposal aims to redefine economic viability for a variety of public investment projects in India. The revision has implications for ministries involved in long-term ventures such as…Read the original at Economic Times
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