This paper analyses the key issues faced by private investors in the infrastructure sector in India and also summarises the key elements of the UK infrastructure regime which has been successful in attracting significant private and foreign investment in the infrastructure sector.
The need for significant investments in Indian infrastructure, critical to enable and sustain high economic growth, is well established. It is also widely accepted that such levels of investment cannot come from the government alone.
The Indian private sector has been participating in the country’s Public Private Partnership (PPP) programme for the infrastructure sector for over a decade but the level of private investment has slowed down significantly over the last few years. The Government of India has recently taken a number of pro-active steps towards infrastructure funding including increasing public spending, creation of the National Investment and Infrastructure Fund (NIIF) and has also commissioned the Kelkar Committee Report on Revisiting and Revitalising the Public Private Partnership Model of Infrastructure. The UK has a well-established and mature PPP framework with extensive experience in enabling private sector investment and expertise to be used to deliver public services.
While the funding of Indian infrastructure has been analysed by a number of committees, including the recently concluded Kelkar Committee, this initial report by the IUKFP working group on Infrastructure Funding takes a practitioner led view. The working group intends to continue to finalise some of the emerging recommendations in consultation with practitioners and policy makers from both India and the UK.