Critical Analysis of PPP model in infrastructure sector in India

Abstract

newline Considering the need to build the best public infrastructure in the country which can contribute positively to the GDP of the country, this research study focused on how high-quality and cost-effective infrastructure can be built providing the best services to citizens and boosting their quality of life. The PPP model in infrastructure is essential considering the impact of the overall slowdown in the Indian economy in the last decade and the big blow to the economy due to the Covid-19 pandemic. This study attempted to investigate the causes of the disappointing performance of the PPP model in the last decade and suggest measures to restructure the PPP model in India. newlineThe prime focus of the PPP program in India was getting efficiency gains and capital from the private players. The government of India set up the PPP framework in India and by 2011, India was the second-largest country in terms of initiating PPP projects. After 2011, the number of PPP projects started declining due to lackluster responses from developers and investors. The PPP program in India was moderately successful in achieving the desired objectives and narrowing the infrastructure gap. The benefits would have been even more substantial if the PPP program had been better planned and executed and some undesirable effects would have been averted. The disappointing financial returns to the private developers and investors have emerged as the most significant reason for the PPP in India coming to a standstill by the end of 2019, ahead of the emergence of the Covid-19 pandemic. newlineThe failure to incorporate policies to mitigate various issues during the design, construction, and operational phase in the PPP contract, poor contract management, lack of dispute redresser mechanism, regulatory issues, ineffectual risk allocation among partners, unbalanced contract design, inefficient execution of contract leads to failure of the PPP model In India.