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Evolution of Financing Needs in Indian Infrastructure
Pankaj Sinha
2012
India has emerged as one of the fastest growing economies even in the difficult financial downturn era. In coming years, India will be demanding a large number of infrastructure services to match the demand and keep an upward sloping growth curve. Indian infrastructure including both soft (port services, air and telecom) and hard (road, railways and airways) infrastructure is growing at a fast pace at present. The country also has largest road network (3.34 million km) and second largest rail network of the world. Requirement for investment in infrastructure projects was expected to increase by 145.6% from Five Year Plan 2002-07 to FYP 2007-11. Part of the investment is expected to come from the various resources as public private partnerships and public investments. Indian government is also trying to experiment with different tools of PPP (public private partnerships) financing such as VGF (viability gap financing), SPV (special purpose vehicle) to decrease the deficits on the acc...
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Indian budget 2017-18 summary
Aeon The Good
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Pradhan Mantri Gram Sadak Yojana, GOI Budget Briefs 2011-12
Avani Kapur
papers.ssrn.com
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5.1 Public Investments in India: Delays and Cost Overruns
Prof. Sebastian Morris
This 88 per cent would amount to about 66 per cent once the adjustments for the expected inflation are taken into account. Unlike modern private projects which go through financial closure, wherein anticipated inflation is taken into account, in India, government projects go by costs and prices valid at the time the proposal is made. These are updated in most cases when the approval is finally granted, but at prices that are at best valid at the time of approval, and in rare cases when the quotes are valid for longer, they could be anticipatory. With some assumptions, it is possible to net out this inflation effect to arrive at the true (avoidable) cost overrun. See Morris, S. (1990). Multivariate Model All projects were categorized as belonging to three lists : pre-1991, 1991-3 and 1994-8 lists. Similarly, projects were categorized into 14 classes, based on both the sector (not necessarily the administrative category) and the activity of the project. Thus, irrespective of the sector, all aquisition projects were categorized as belonging to the type 'Acqusition'. Acquisition projects involve only acquisition of equipment with minimum customization and associated implementation, and were expected not to have any time and cost overruns. Thus acquisition of vessels by the Shipping Corporation of India, of telecom exchanges by the Department of Telecommunication (DoT), Mahanagar Telephone Nigam Limited (MTNL), Bharat Sanchar Nigam Ltd (BSNL), etc., and aircraft by the airline companies, were in this category. Similarly, 'Generation' was defined as all electricity generation projects with generation as the main output, irrespective of whether it was a captive project by Steel Authority of India (SAIL) or a utility plant by the National Thermal Power Corporation (NTPC).
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Financing Infrastructure in India - Issues and the Way Forward
Prof. Sebastian Morris
Social Science Research Network, 2019
Optimal approaches that recognize the specific kind of market failure/s, in the policy and design of infrastructure, greatly reduce the financing costs and improves the ability of to attract finance in the private provisioning of infrastructure. When state systems are weak organizationally it is first best to strengthen the state capacity so that it can minimally perform the roles of design, regulation, development of frameworks, and of monitoring, for the private provisioning of infrastructure. This is particularly so in the case where there are dual market failures arising out of both the natural monopoly and the appropriability failure aspect. Thus sewerage and water, city roads, multimodal facilities, solid waste, public health care, the challenges have proven beyond the current ability of the state, despite its large commitment to the use of private capital. The challenges in design and policy are large and with many false starts it is only now barely beginning to be considered in India. Thus infrastructure design rather than debilities in financial markets remain the key problem. The need to develop capital markets and institutions to lend long is vital, but much of the challenge is really in having good projects that are financed keeping in mind the capacity limitations within banks and financial institutions. The potential to use of foreign capital to finance infrastructure is often overstated. Reform of financial institutions (FIs) and banks is vital today, as also the necessary incorporation of interest rate (change) risks into the project cost to overcome adverse selection. The forces leading to the current mess-up of the Indian banks and FIs in lending to infrastructure are brought in perspective. The key issues in developing state capacity, and the changes required for getting the design of infrastructure right, as also to bring functionality to the role of financial institutions in the private development of infrastructure are highlighted.
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Selected measures proposed and taken by current Indian government
Dominik Proch
Köz-gazdaság
ndia is going to have the second largest population and one of the largest markets in the world, however, trade and investment environment have been unsatisfactory. The economy was being paralyzed between 2011 and 2013 after long-standing problems had appeared. Nevertheless, a paradigm shift can be seen since 2014. In that year, Indian People’s Party won a majority in the general elections and Narendra Modi became the Prime Minister. Under his government, several programs have been introduced and some of them already implemented. The main objective is liberalization, deregulation or computerization, together calling for higher investment and trade exchange. GST is one of the most discussed reforms since it should have brought a unified tax system across all federal states with more transparent requirements for foreign entities. Subsequently, voluminous programs such as Make in India, Digital India, Clean India etc. have being promoted. Despite the fact that businesses can benefit fr...
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Review of Infrastructure Development and Its Financing in India
Reena Agrawal
Paradigm, 2020
Infrastructure is one of the most crucial pillars of productivity in any economy. Pushing infrastructure development and particularly organizing funds for infrastructure projects have been the biggest challenge in developing nations. The present study was taken up to review the infrastructure development and its financing in India. The study intended to (1) study the infrastructure development in India in the 11th and 12th Five Year Plan, (2) examine the sources used for infrastructure financing in India, (3) assess the actions taken by government to facilitate infrastructure financing and (4) propose measures to augment infrastructure financing to overcome infrastructure deficit in the country. It was found that though Government of India and Reserve Bank of India have taken several initiatives to facilitate infrastructure financing, there still exists a vast gap between supply side and the demand side. Some of the recommendations given in the paper include the need to evolve innov...
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IRJET- Policies of Indian Economy to Combat Recession
IRJET Journal
IRJET, 2020
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Nitesh Kumar
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Estimates of Urban Infrastructure Financing Requirements in India 2006-2031
Shubhagato Dasgupta
2016
The paper describes the estimation exercise, i.e. the Urban Infrastructure Per Capita Investment Cost estimation and projection of urban finance requirements for the period 2006-2031 referred to as the 2006-2031 Urban Infrastructure Finance Estimation Exercise (2006-2031 UIFEE). The 2006 – 2031 UIFEE is special as it the first one in more than a decade of its nature, covering all urban infrastructure sectors. These new estimates covering the period 2006-2031 will add on to the Rakesh Mohan Committee estimates that projected investment requirements till 2006. This estimation exercise is unique as compared to the earlier estimation exercises for a host of reasons including the level of granularity of the projections and its reliance on real project data, which has been appraised by a variety of expert institutions. The demand driven nature of the projects also ensure that the projects are essential to the requirements of the citizens.
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