+
Finance ministry urges identifying projects for private partnerships
ECONOMY & POLICY

Finance ministry urges identifying projects for private partnerships

The finance ministry has instructed infrastructure departments to locate projects that have the potential for execution through private partnership, as conveyed by an informed individual.

The intention behind this action is to attract a larger amount of private capital into public infrastructure and to minimise the setbacks in project execution. The individual mentioned that there will also be a focus on enhancing the flow of funds into sectors like urban infrastructure, railways, and roads. In these sectors, private participation is either minimal or falls short of being impressive.

For the current financial year, the ministry is planning to introduce a new architecture for public-private partnerships (PPPs) and a standard model concession agreement (MCA) framework for various infrastructure sectors.

As per the anonymous source, "Although the government has taken significant measures to increase capital expenditure in recent years, it is also important to involve private entities more, given the substantial funding requirements in the infrastructure sector."

The proposed MCA framework will function as a standard reference document for different infrastructure departments and government-run entities. It will provide them with the necessary flexibility to incorporate clauses that are specific to their respective sectors. The main focus will be on ensuring that the projects are financially viable and attractive to private investors.

This move comes at a time when there is a gradual resurgence in broader private investments, with senior industry executives anticipating a widespread recovery in the year 2023-24.

The government is also encouraging central public sector enterprises (CPSEs) to increase capital expenditure without any delays.

In April 2020, a government task force working on the National Infrastructure Pipeline (NIP) had projected capital investments amounting to Rs 111 trillion by 2024-25. The distribution was expected to be almost equal between the Centre (39%) and the states (40%), followed by the private sector (21%).

However, due to the pandemic, the revival of private investments was postponed as companies deferred their expansion plans. Consequently, the government significantly increased its capital expenditure to stimulate economic growth, banking on its substantial multiplier effect.

Also read: 
Honer Homes unveils Rs 30 bn mega project, Honer Signatis  
Provident Housing launches Rs 20 bn Sustainable Living Project 


The finance ministry has instructed infrastructure departments to locate projects that have the potential for execution through private partnership, as conveyed by an informed individual. The intention behind this action is to attract a larger amount of private capital into public infrastructure and to minimise the setbacks in project execution. The individual mentioned that there will also be a focus on enhancing the flow of funds into sectors like urban infrastructure, railways, and roads. In these sectors, private participation is either minimal or falls short of being impressive. For the current financial year, the ministry is planning to introduce a new architecture for public-private partnerships (PPPs) and a standard model concession agreement (MCA) framework for various infrastructure sectors. As per the anonymous source, Although the government has taken significant measures to increase capital expenditure in recent years, it is also important to involve private entities more, given the substantial funding requirements in the infrastructure sector. The proposed MCA framework will function as a standard reference document for different infrastructure departments and government-run entities. It will provide them with the necessary flexibility to incorporate clauses that are specific to their respective sectors. The main focus will be on ensuring that the projects are financially viable and attractive to private investors. This move comes at a time when there is a gradual resurgence in broader private investments, with senior industry executives anticipating a widespread recovery in the year 2023-24. The government is also encouraging central public sector enterprises (CPSEs) to increase capital expenditure without any delays. In April 2020, a government task force working on the National Infrastructure Pipeline (NIP) had projected capital investments amounting to Rs 111 trillion by 2024-25. The distribution was expected to be almost equal between the Centre (39%) and the states (40%), followed by the private sector (21%). However, due to the pandemic, the revival of private investments was postponed as companies deferred their expansion plans. Consequently, the government significantly increased its capital expenditure to stimulate economic growth, banking on its substantial multiplier effect. Also read:  Honer Homes unveils Rs 30 bn mega project, Honer Signatis  Provident Housing launches Rs 20 bn Sustainable Living Project 

Related Stories

Gold Stories

Next Story
Products

Interio by Godrej launches modular workplace solutions

Interio by Godrej has launched Workscapes, a modular workplace solutions category designed to help organisations configure and adapt workspaces to changing requirements. The portfolio combines mobile and compatible furniture and support elements that can be rearranged across different work modes without changes to fixed layouts.Workscapes includes Collaboration Tables, Privacy Solutions, Mobile Markerboards and Space Dividers, Power Solutions, Storage and Support Elements, Meeting and Presentation Tools, and Seating Elements. The range is designed for focused work, collaboration, informal disc..

Next Story
Infrastructure Urban

CAFE-III Gives Auto Industry Investment Clarity

The government’s new Corporate Average Fuel Economy (CAFE-III) norms have provided the automobile industry with a clearer framework for technology investments, according to industry representatives. The framework seeks to balance environmental objectives with flexibility for manufacturers while encouraging the adoption of flex-fuel vehicles and biofuels. Society of Indian Automobile Manufacturers (SIAM) President Shenu Agarwal said the five-year framework would give automakers greater predictability to plan investments and accelerate innovation. He said the regulation established annual targ..

Next Story
Infrastructure Energy

Mines Ministry to Auction Two Offshore Mineral Blocks in Andaman Sea

The Ministry of Mines will launch an auction of two offshore mineral blocks in the Andaman Sea on Thursday, seeking to unlock India’s offshore mineral potential and strengthen long-term mineral resource security. The blocks will be offered under a composite licence, which permits exploration and development activities in accordance with the applicable regulatory framework. The ministry said the auction was intended to encourage systematic exploration, attract investment and promote the use of advanced technologies for offshore mineral exploration and development. The initiative is also aimed..

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

SPECIAL OFFER
QR Code