New Delhi, Oct 27 (KNN)  Infrastructure is the backbone of a growing economy, underpinning its competitiveness and self-sufficiency. However, consistent apathy and deep funding gaps have crippled India's infrastructure over time, especially in crucial sectors such as airports, ports, roads and railways, an industry body report said, suggesting ways to revive public-private partnership momentum.

The FICCI-EY report also pointed to the fact that the rising urbanization and expanding trade have put immense pressure on the existing infrastructure, according to an official release.

“This has had a negative multiplier effect on the economy, hampering trade, efficient logistics, connectivity and business operations. It has been estimated that transport constraints 1 result in a loss of 2 per cent -3.5 per cent in India's GDP,” it said.

The report further said that the private sector has a key role in building the country's transport infrastructure. “There is a need to resolve multiple issues dampening the private sector interest and slowing the rate of private investment in the sector. There is need to undertake some key interventions to remove the roadblocks to PPP and accelerate the implementation of PPP projects. These interventions would range from policy actions, regulatory changes and push the reforms agenda which will create conducive environment for bringing investments into the sector.”

It has therefore proposed key interventions with regard to land acquisition, improving access to long-term financing instruments; establishing single-window mechanism for obtaining clearances and approvals as well as regulatory approvals; improving capacity of government authorities to structure PPPs; and innovations for successful PPPs. 

Over the past few years, the role of PPP in India has gradually evolved from asset creation to operation of projects. However, this evolution is being hindered by a number of challenges faced across the lifecycle of the PPP process. Thus, reviving and building a world-class transport infrastructure is among the top priorities on Prime Minister Narendra Modi's development agenda.

The Union Budget has pledged an additional expenditure of INR700 billion over 2015-16, primarily on roads, railways and ports, 2,3 among other key projects. Furthermore, the Eleventh and Twelfth Five Year Plans (FYP) have laid emphasis on the massive expansion and modernization of infrastructure, with special focus on transport sub-sectors, including roads and bridges, railways, ports, MRTS and airports.

The private sector participation in infrastructure projects increased from around 22 per cent (INR2 trillion) in the Tenth Five Year Plan to 37 per cent (INR8.9 trillion) in the Eleventh Five Year Plan. It is expected to rise further to around 48 per cent (INR26.8 trillion) in the Twelfth Five Year Plan. Public-Private Partnerships (PPP) have acted as a key enabler in major infrastructure projects of varying scales in India, ranging from leading construction projects to managing operational activities. (KNN Bureau)