Pointing out that public private partnership (PPP) has delivered iconic infrastructure like airports and highways, Union Finance Minister Arun Jaitley on Thursday maintained a steady focus on PPP in his maiden Budget for 2014-15, announcing a number of steps to fast-track such projects in several areas.
In his Budget speech, Mr. Jaitley proposed setting up of an institution, called 3P India, with a corpus of Rs. 500 crore to provide support to mainstreaming PPPs.
The stamp of ‘Modinomics’ could not be missed in favouring the PPP route for development as the BJP’s manifesto and Prime Minister Narendra Modi rooted for it to help create world-class infrastructure in the country.
However, Mr. Modi during his tenure as Gujarat Chief Minister had added another ‘P’ (People) to it to signify people’s involvement in such project and the 4P concept was successfully tried in the Vadodara Halot Toll Road project.
The favoured PPP route ran like a common thread in Mr. Jaitley’s speech when he touched upon sectors such as urban renewal, urban transportation, real estate and gas pipelines.
“The task before me today is very challenging because we need to revive growth, particularly in manufacturing and infrastructure to raise adequate resources for our developmental needs,” Mr. Jaitley said.
Largest PPP marketThe Finance Minister said India had emerged as the largest PPP market in the world with over 900 projects in various stages of development. Iconic infrastructure like airports, ports and highways, delivered through PPPs, are seen as models for development globally, he said.
Sounding a note of caution, Mr. Jaitley said: “But we have also seen the weaknesses of PPP framework, the rigidities in contractual arrangements, the need to develop more nuanced and sophisticated models of contracting and develop quick dispute redressal mechanism.”
He reiterated the government’s commitment towards improving infrastructure in all sectors including roads, port, airports, railways, urban, rural and industrial infrastructure besides ensuring adequate flow of funds and financing of projects.
Mr. Jaitley proposed to develop an additional 15,000 km of gas pipeline systems in the country using appropriate PPP models.
“This will help increase the usage of gas, domestic as well as imported, which in the long-term will be beneficial in reducing dependence on any one energy source,’’ Mr. Jaitley said.
