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and urban local bodies through PPP model, as required, to meet the
project cost.
PPP mechanisms in India utilize a number of public finance
instruments that can help remove barriers to private investment. The
policy rationale for PPP, in India, is often limited to the use of PPPs
as a source of investment capital when the public sector lacks fund.
Consequently, on ground, they seldom deliver efficient service and
value for consumers and taxpayers. The instruments in PPPs include
loan guarantees, which allow lower interest rates for borrowers as the
lender is protected against default; mixed equity funds, which lower
the risks for private equity investors by subordinating the public
capital in the fund, thus giving private investors their returns first
and again protecting against the risk of project default or lower than
expected financial performance (KPMG 2011).
The present Finance Minister of India, Mr Arun Jaitley, during his
Union Budget 2014–15 speech, had mentioned that India has emerged
as the largest PPP market in the world with over 900 projects in various
stages of development. However, weaknesses of the PPP framework
have also been quite evident. Delays in 110 central infrastructure
projects, due to regulatory hurdles have resulted in over INR 1.57 lakh
crore (approx. USD 26.17 billion) cost overruns (Outlook India 2014).
Private sector has called for improvement in India’s enabling
environment including transparency in the bidding process,
standardization of procurement procedures and transparency in the
entire PPP project cycle. For public private partnerships to work, both
sectors need to work collectively and keep the focus on project and
outcomes rather than fulfilling self-interests. There is need to build
capacity for evaluation and oversight. A set of policy, regulatory, and
capacity issues need to be addressed to use PPPs more widely for
better infrastructure service delivery.
2.2.7 Philanthrophy
The private sector’s participation through financial and technical
contribution in India is through corporate social responsibility (CSR)
and philanthrophy. The Companies Act of 2013 mandates that a
company having net worth of rupees five hundred crore or more
(approx. USD 83.33 million or more), or turnover of rupees one
thousand crore or more (approx. USD 166.67 million) or a net profit of
rupees five crore or more (approx USD 0.83 million or more) during
any financial year shall constitute a Corporate Social Responsibility
Committee to implement CSR activities.
274 Low Carbon Development in China and India
project cost.
PPP mechanisms in India utilize a number of public finance
instruments that can help remove barriers to private investment. The
policy rationale for PPP, in India, is often limited to the use of PPPs
as a source of investment capital when the public sector lacks fund.
Consequently, on ground, they seldom deliver efficient service and
value for consumers and taxpayers. The instruments in PPPs include
loan guarantees, which allow lower interest rates for borrowers as the
lender is protected against default; mixed equity funds, which lower
the risks for private equity investors by subordinating the public
capital in the fund, thus giving private investors their returns first
and again protecting against the risk of project default or lower than
expected financial performance (KPMG 2011).
The present Finance Minister of India, Mr Arun Jaitley, during his
Union Budget 2014–15 speech, had mentioned that India has emerged
as the largest PPP market in the world with over 900 projects in various
stages of development. However, weaknesses of the PPP framework
have also been quite evident. Delays in 110 central infrastructure
projects, due to regulatory hurdles have resulted in over INR 1.57 lakh
crore (approx. USD 26.17 billion) cost overruns (Outlook India 2014).
Private sector has called for improvement in India’s enabling
environment including transparency in the bidding process,
standardization of procurement procedures and transparency in the
entire PPP project cycle. For public private partnerships to work, both
sectors need to work collectively and keep the focus on project and
outcomes rather than fulfilling self-interests. There is need to build
capacity for evaluation and oversight. A set of policy, regulatory, and
capacity issues need to be addressed to use PPPs more widely for
better infrastructure service delivery.
2.2.7 Philanthrophy
The private sector’s participation through financial and technical
contribution in India is through corporate social responsibility (CSR)
and philanthrophy. The Companies Act of 2013 mandates that a
company having net worth of rupees five hundred crore or more
(approx. USD 83.33 million or more), or turnover of rupees one
thousand crore or more (approx. USD 166.67 million) or a net profit of
rupees five crore or more (approx USD 0.83 million or more) during
any financial year shall constitute a Corporate Social Responsibility
Committee to implement CSR activities.
274 Low Carbon Development in China and India
