Public Private Partnership in India's Infrastructure Development

The key factor obstructing India's growth is the lack of world class infrastructure.. Estimates suggest that this lack of adequate infrastructure reduces India's GDP growth by 1-2 percent every year. Fast growth of the Indian economy in recent years had placed increasing stress on physical infrastructure such as electricity generation, railways, roads. airports. ports. irrigation. water supply and sanitation systems all of which already suffer from a substantial deficit. Physical infrastructure has a direct impact on growth and overall development of an economy. The goals of inclusive growth and a 9 percent GDP growth year over year can be achieved only with better infrastructure in place. Infrastructure development will also help to create a better investment climate in India. To develop infrastructure in the country the government needs to review issues on budgetary allocation, tariff policy, fiscal incentives. private sector participation and Public Private Partnership (PPP) in infrastructure development projects. PPP is an effective tool to bridge the infrastructure gap. Public Private Partnership involves the private sector in providing the infrastructure assets for both new and existing infrastructure services that had been traditionally provided by government sectors. They broadly refer to long term contractual partnership between the public and private sector agencies, specifically targeted towards financing, designing, implementing and operating infrastructure facilities and services. These collaborative ventures are built around the expertise and capabilities of the project partners and are based on a contractual agreement. The agreement ensures appropriate and mutually agreed allocation of resources. risk and returns. Many governments have reformed their utilities without private sector participation, some seek finance and expertise from private companies to ease fiscal constraints and increase efficiency in completing the projects. By engaging the private sector and giving it defined responsibilities governments can broaden their options for delivering better services. PPP's can emerge as a Win-Win model for the public as well as private sector and most importantly for the Citizens of the country. Hence, it is important to study about the Public Private Partnership in India's infrastructure development. In an increasingly competitive global environment, governments around the world are focusing on new ways to finance projects, build infrastructure and deliver services. Public Private Partnership (PPP's or P3's) is becoming a common tool to bring together the strengths of both sectors. In addition to maximizing efficiencies and innovations of Private enterprise. PPP's can provide much needed capital to finance government programs and projects. thereby freeing Public funds for core economic and social programs. PPPs can bring about win-win solutions whereby both commercial and developmental goals are achieved. In addition to job creation ana raised incomes, these can also include a greater availability and choice of improved goods and services at lower prices. also for the poor.
 

Write a review