Public Provisioning of Infrastructure Changing Strategies: Empirics of India

The present study has made an effort to answer the vital question as to what extent the unmet infra needs of the economy have been addressed by the alternative strategy to the public budgeting through public–private partnerships (PPPs) in the Indian context. The analysis reveals that there exists a strong theoretical support base for PPP as an alternative to the public budgeting of infra services provision. The growth of PPP projects across the infra sub-sectors and various geographical regions has changed the public provisioning of infra services in India since the late 1990s. The few infra sub-sectors, mainly transport, limited to national highways (NHs), airports and urban infra projects being developed through PPP mode, whereas the health and education and rural infra projects continue to remain unattractive despite their huge inadequacy. The study also brings out the positive impact of competition on the project cost of PPPs, in terms of reducing the financial burden of governments. The results also reveal that ex-ante competition has an inverse association with the unit cost of projects in the case of select national highway PPPs. Finally, the study, based on an analysis of the quantitative and qualitative value for money (VfM), explains the financial and non-financial savings to the government and other users from the select NH projects. The quantitative VfM results prove that in respect of three out of the four select NH PPPs, the government has been able to save substantially (i.e. a sum of Rs. 1037 crore through PPP mode), while the qualitative VfM results prove that there are significant gains to the users in terms of a reduced travel time, fuel efficiency, travel time consistency, improved road safety and pothole-free roads.