Infrastructure is the cornerstone of a nation’s development and global standing and India is no exception to that ideology. Be it roads, highways, airports or real estate, the quality and magnitude of infrastructure is a key indicator of how well the country is progressing on a macro-economic level.
Keeping that in mind, rapid execution of infrastructure projects becomes crucial. However, the lack of investment in the industry is a big roadblock that tends to slow down the whole process. This is where Public Private Partnerships come as a viable solution as they can be the catalysts to help revive the growth of infrastructure in India.
What is PPP?
The concept of PPP has never been very clearly defined. It is basically a partnership in which infrastructure projects that are under the mandate of the public sector will be executed using the capital provided by the private sector as per the contract signed by both the entities.
Infrastructure in our country hasn’t been able to grow in tandem with the growth in economy. This is where the need for PPPs gets highlighted as they can help in achieving infrastructure growth at the ideal rate which helps the overall growth of the country and its economy.
Focus on revival of infrastructure
With the latest Budget, Finance Minister has made it clear that the new Government’s focus is on the revival of the infrastructure sector. One of the steps that he has implemented in that direction is the proposal to set up an institution to provide support to PPPs. It will be called 3P and will start up with an initial corpus of Rs. 500 crores.
The biggest failing of the PPP model since the liberalization of the economy in 1991 has been the rigidity and the ambiguousness of the contracts signed between the public and private entities. The Finance Minister recognizes that and has advocated the need to develop a more refined and coherent framework with a swift dispute redressal system.
Once that transparency is in place, the PPP model has the potential to live up to the expectations preceding it and help fast track infrastructural growth of India. Improvement on this front can have a snowballing effect towards the growth of economy and result in a marked improvement in the amenities and the living standard of the citizens of the country.
