PPP Infrastructure Finance: An Empirical Evidence from India

Published By: Institute for Social and Economic Change

Financing of infrastructure is vital for the creation and maintenance of adequate infrastructure. The present paper has attempted to analyse various infra financing methods practised in India, namely, debt and equity capital, sources of debt and analyses of PPP (Public Private Participation) debt equity ratios. The empirical results reveal that in India, prior to the early 1990s the government predominantly financed infrastructure. Later, various government proactive measures welcomed private sector participation. This resulted in a decrease in the share of public investment and rapidly increased private investment, which could reach 50 per cent of the total infra-investment by the end of the 12th Plan. Further, the paper explains that financial patterns practised in the PPP are more of debt capital than equity. This has many limitations and this practice is not with the theoretical support and guidelines of SEBI and others. Further, the paper reveals that infrastructure debt is sourced mainly from the commercial banks, which has many restrictions and has resulted in slower growth of infrastructure investment than expected.

Author(s): K Gayithri | Posted on: Dec 04, 2017 | Views() | Download (95)


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