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Public Private Partnerships in India

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PUBLIC PRIVATE PARTNERSHIP IN INDIA

Public Private Partnership or PPP is a subject being given the increasing attention that it has been receiving in context of the sweeping changes in India's economic policies. We are all aware, along with the dismantling of the license permit raj a greater role is envisaged for the private sector in these new policies. Now it seems that, the private sector is not only to be facilitated in its growth, but there it can be taken on board as a partner by the government in the provision of public services. This of course, is the purpose of PPP. For those of us who have had a long innings in Government, such thinking represents a paradigm shift from the way things were always done. I am aware of the fact …show more content…

The key words seem to be rewards and risks.
Having said this, I may state that this scenario gives rise to a host of issues to the mind of a practical administrator. Some of them would be on these lines:
• Firstly, when should a public project opt for PPP? Does the project lend itself to the model, or indeed justify sharing of the rewards with the private sector. The U.K. was one of the first countries to go into partnership with the private sector for providing public services. They have been fairly successful in this respect. One of their PPP models is called the Public Finance Initiative (PFI), wherein the government contracts to purchase services on a long term basis from a private provider, who may build, maintain and operate infrastructure. The costs may be met from user charges, along with state subsidies, which are a form of "viability gap funding". However while implementing the PFI program, the U.K. government had issued guidelines on the types of projects that needed to be taken up under it. These guidelines stated that "PFI is appropriate where there are major and complex capital projects with significant and ongoing maintenance requirements. Here the private sector can offer project management skills, more innovative design and risk management expertise that can bring substantial benefits." In other words it is clear that PPP can be

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