Infrastructure refers to all those services and facilities
that constitute the basic support system of an economy. It is the foundation
on which the day to day functioning of all the economic activities of
a country depends. It consists of the transportation network in the form
of railways, roadways, ports and civil aviation; the tele-communication
system as well as the power sector. All such utilities, through their
backward and forward linkages, provide an enabling environment for facilitating
the growth of a nation.
Recognizing the critical importance of the infrastructure
sector, the Government of India has accorded it a high priority. Accordingly,
both the Central and the State Governments have been working in tandem
to upgrade the Indian infrastructural set up to meet the international
norms and standards. But, investment in existing and new infrastructure
projects involves high risks, low returns, huge capital, high incremental
capital/ output ratio, long payback periods as well as superior technology.
Hence, in order to bring in adequate resources (physical,
financial and technical) for setting up of a sound and efficient infrastructural
base, the Government has entered into the 'Public Private Partnership
(PPP)' programme. This programme involves long-term detailed contracts
between the Government and the private players, spelling out the rights
and obligations of both the contracting parties. Such public-private partnership
encourages better risk sharing, accountability, cost recovery and management
of infrastructure. Through such initiatives, the Government is moving
away from its traditional role of 'provider of services' to that of a
'facilitator and regulator'.
As a facilitator, the Government has been engaged in
instilling confidence in the private sector by creating an appropriate
policy framework.
The policies envisage several incentives and schemes to attract massive capital into the infrastructure industry. At the same time,
the Government continues to fulfill its social obligations through proper
checks and balances in the form of a transparent regulatory system. The
role for regulation is to protect the interests of consumers and foster
an institutional set up, which helps in delivering infrastructure services
of high quality at low prices.
The setting up of a 'Committee on Infrastructure (CoI)'
has been a major step in this direction. It has been constituted with
the objectives of:-
- Initiating policies that ensure time-bound creation
of world class infrastructure
- Drawing a priority list of
projects aimed at augmenting and modernizing the infrastructure capacity
-
Developing structures that maximize the role of public-private partnerships
in the field of infrastructure
- Monitoring progress of the infrastructure
projects to ensure that established targets are realized;
- Identifying
measures to refine project formulation, project planning and project management
processes in line with international best practices; etc.
The Committee has estimated the investment requirements
for some of the key infrastructure sectors, to be achieved by 2012. These
include:- Rs. 2,20,000 crore for modernization and upgradation of highways;
Rs. 40,000 crore for civil aviation; Rs. 50,000 crore for ports; and Rs. 3,00,000
crore for railways.
Thus, India's enormous unmet infrastructure needs, combined
with the public private partnership approach, offer an unprecedented investment
opportunity for the private players. These opportunities, having the potential
of attractive returns, exist in all the infrastructural sectors, both
at the national and State level.
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