FeaturesChallenges

FutureDr. Raj Agrawal

Physical structures and networks used to provide essential services to a society.

Backbone of an economy.

Two categories:(a) Economic infrastructure(b) Social infrastructure

Huge need for investment Investment in infrastructure drives

growth Urgent need for private capital Transport & telecommunication

command special interest Welfare of the society

ECONOMIC INFRASTRUCTURE SOCIAL INFRASTRUCTURE

Transport, Toll roads, Bridges, Tunnels, Seaports, Airports, Railways

Energy & Utility, Gas distribution storage, Water treatment, Electricity generation

Communication, Satellites, Cable networks

Healthcare facilities Education facilities Social housing Judicial facilities Incidence Of Poverty

Power Irrigation Drinking Water Roadways Railways Aviation Telecommunication  

Approval limit relaxed Tax incentives to Financers, Operators,

Capital market investors Institutional initiatives (IDFC, ADB) ECB’s for Infrastructure Promotion of private investments Inviting foreign investors

Definition Eligibility Government support Approval of project proposals Procurement process for PPP projects Appraisal & monitoring by lead financial

institutions

PPPs in India are at a nascent stage

Slew of measures by government 100% foreign investment allowed in infra sectors Regulatory institutions (Telecom Regulatory

Authority, Port Tariff Authority)

PPPs in India are accelerating 118 projects valued at $13.4 billion are

progressing in roads, ports, airport sectors

World Economic Forum has noted that India’s annual investments in infrastructure between 1998 and 2005 averaged 4% of GDP compared to 8.2% for China

Government of India is addressing the infrastructure requirements

11th Five Year Plan (2007-2012) calls for more than doubling the financial outlay for infrastructure

Total financing requirements $492 billion in the next five years

Of this, $147 billion to come from private investment

Share of private investment in total to rise from 17% to 30% by 2012.

Investment to touch $1.48 trillion by 2017

India growth story likely to continue

Strong economic growth will fuel further demand on infrastructure

India should absorb the large investments in infrastructure sector to sustain growth momentum.

Investment requirements of infrastructure sector huge

India growth story to continue 50% of the population is below 25 years Huge domestic demand

Need to bridge infrastructure gaps to sustain economic growth

Opportunities for international investors significant

India can leverage on its vast human capital to successfully adopt the PPP model