Indian Budget looks forward to PPP investment


India’s annual Budget has covenanted to rise investment in infrastructure by 70,000 crore ($11bn) in 2015-16 to boost PPP model

Finance Minister Arun Jaitley announced that the government would be increasing investment in a number of areas, including road and rail projects.

Jaitley also revealed plans for the construction of a National Investment and Infrastructure Fund (NIIF) , that will finance equity in infrastructure finance companies.

As described in the country’s Economic Survey, published last week, the Indian government is also recommending to make a number of variations to the country’s PPP legislation.

“The PPP mode of infrastructure development has to be revisited, and revitalised,” Jaitley said. “The major issue involved is rebalancing of risk. In infrastructure projects, the sovereign will have to bear a major part of the risk without, of course, absorbing it entirely.”

The Economic Survey had brought out a number of faults in the current PPP model, which had restricted the amount of investment coming from investors into projects.