Imapact of PublicPrivate Partnership in Infrastructure Inclusive Growth in India
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Date
2011
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Abstract
Development o f an economy depends on the quantum o f investment made on
infrastructure. Before economic reforms infrastrubture development was considered
to be the domain o f the government. Since economic reforms o f 1991, it was realized
that the government alone could not meet the financial requirements o f
infrastructure and that the participation o f private sector is also essential. To have
sustained growth, India should avoid the mistake o f reducing investment in
infrastructure made by many Latin American and East'Asian countries in the 1990s
when they faced financial crises. Reducing investment in infrastructure turned out
to be a short-sighted fiscal solution, making it all the more difficult for these
countries to get out o f recession. India faces extraordinary challenges in achieving
its ambitious medium-term infrastructure investment program, anchored in the
Government o f India’s XI Five-Year Plan (2007-12) document. The plan has
estimated that US$492 billion is needed over the next five years in improving roads,
raihvays, ports, power, and water. This would require almost doubling infrastructure
spending from its current 5 percent o f GDP. In this backdrop, an attempt was made
to analyse the impact o f public private partnership in infrastructure on inclusive
growth in India. The findings o f the study show that the increase in the number o f
projects in infrastriiciure under public private partnership could bring inclusive
growth in the states. The value o f the projects was not a matter to contribute to
inclusive grow’th o f the states.