UPSC Mains 2014 · GS III · Q7 · 12.5 marks · 200 words

Explain how Private Public Partnership arrangements, in long gestation infrastructure projects, can transfer unsustainable liabilities to the future. What arrangements need to be put in place to ensure that successive generations’ capacities are not compromised?

हिन्दी में

समझाइए कि दीर्घकालिक पक्वनावधि (जेस्टेशन) आधारिक संरचना परियोजनाओं में निजी लोक भागीदारी (प्राइवेट पब्लिक पार्टनरशिप) किस प्रकार अधारणीय (अन्सस्टेनेबल) देयताओं को भविष्य पर अन्तरित कर सकती है। यह सुनिश्चित करने के लिए कि उत्तरोत्तर पीढ़ियों की सक्षमताओं के साथ कोई समझौता न हो, क्या व्यवस्थाएँ स्थापित की जानी चाहिए?

Investment ModelsInfrastructure

How a topper answered the closest question

Toppers wrote this one in a test series: “The key to sustaining private investments in infrastructure requires a concerted effort to resolve long-standing issues. Discuss in context of India's PPP framework.”

Waseem Ahmad BhatAIR 7 · CSE 2022 · 160 wordsTheir whole copy

Opening · a figure

In the last few years, private investment in India has remained sluggish at around 29% of GDP especially in infrastructure (50% of investment by government).

Body · points

-> Long standing issues in PPP

⊙ Problematic risk allocation in the PPPs leads to problems like stalling of projects in the midway.

⊙ Lack of sufficient tariff hikes in the projects leads to uneven revenue generation.

⊙ Lack of a strong corporate bond market -> only 16% of GDP (73% in South Korea).

⊙ Long time for clearances in environmental and land acquisition issues.

⊙ Time and cost overruns due to over-estimating of capabilities of the private sector.

-> Measures needed

Close · a summary

Vijay Kelkar committee has suggested:

⊙ Proper risk allocation between public & private spheres

⊙ Development of a deep bond market

⊙ Use of new investment models like HAM, PFI, BOT, etc

⊙ Clear pathways for legal dispute resolution.

In this context, government's National Infrastructure Pipeline is a step in the right direction.

How toppers approach this question, and more on its topic: open the question.

Toppers’ answers to other close questions

Source: UPSC, Civil Services (Main) Examination 2014, General Studies Paper III, Q7. The paper on upsc.gov.in. Themes and links to toppers’ answers are by UPSC Grade, not by UPSC.