This month will see three important policy decisions being taken. As the Budget session approaches, the troika of Finance Minister P. Chidambaram, Railway Minister Lalu Prasad and Civil Aviation Minister Praful Patel could help pave the way to keep the India growth story on track. The keyword for this troika: infrastructure. The key expression of this keyword: public private partnerships (PPP).
The numbers are huge — $320 billion to be invested in India’s infrastructure, spread out over the next five years if we are to sustain the 9-10 per cent growth rate, says Chidambaram. That’s about Rs 14,08,960 crore, or 40 per cent of India’s GDP. Not an amount the Government can organise through taxes (public outcry) or borrowings (already standing at Rs 20,59,234 crore). Private capital is needed for which four big constraints have to be resolved: creation of bankable projects, introducing new financial instruments, regulatory framework for PPPs, development of managerial skill. The budget will reveal much on this front.
Opinion in The Indian Express, February 07, 2007