investment in infrastructure in india eco Term Paper

8/7/2019 investment in infrastructure in india eco Term Paper

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Term paper of managerial economics on

Submitted to submitted by

Mrs. Vani mittal Manjit Paul

Reg.no:10902965

ACKNOWLEDGEMENT


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Through my gratitude towards my supporters yet we like to add a fewhearts full for the people who were part of this term paper innumerous ways. People who gave understanding support right projectideas were conceived.First of all I want to thank MRS.VANI MITTAL, LecturerMANAGERIAL ECONOMICS, lovely professional university,

phagwara for assigning this term paper & I also want to give handsfull gratitude to her for her help & guidance. I would like to thank allthe faculty of lovely school of business for having faith in me, & fortheir kind inspiration and helping me whenever asked.Last but not least, I expand my heartiest gratefulness all people whohave given me best wishes & all help that I needed for the completionof the term paper.

MANJEET PAUL

CONTENTS


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Objective of term paper

methodology

Introduction

liberalization is like a boon for infrastructure sectorMajor participation of FDIs In Infrastructure sector

Finance for Infrastructure in India

Foreign Collaboration Approvals

Sectors which are going to call FDIs and thinking aboutprivatizationo Railways infrastructure sector

o highways and roads:

o airporto power

o renewable energy

o India real estate investments

Result

Conclusion

references


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objective of term paper

This term paper is all about to analyze the investment in infrastructure afterliberalization, we will thoroughly study that what changes mainly occurin Indian infrastructure and through which stages it goes through untilnow. we will analyze that from where govt. arrange money forinfrastructural development and we will study the sectors which aretaking the liberalization benefits and the sectors which are going to raiseinvention of private sector and FDIs. then we will discuss the result ofour analysis and then we will try to conclude our research.

Methodology

Methodology is defined as a particular procedure or set of proceduresused in finding the answers of problem or problems. For this there are to

types of data we use primary data and secondary data and we here useprimary as well as secondary data for the analysis of our term paper, wehave taken the help of internet literature for finding the analysis and alsotaken the help of bookbusiness environment: saleem sheikh.

Introduction

Infrastructure in India goes through different stages .it is a very wideterm.it include mainly transportation, housing, water management,industrial and commercial development telecommunications, , agriculture,

power, petroleum and natural gas, , real estate and other segments such asmining, disaster management services, technology-related infrastructure.Here we are discussing investments in infrastructure sector afterliberalization or in post liberalization period. In pre liberalization period,the bulk of infrastructure was in the public sector. Public sector in Indiaoperating in a protected set up which has been largely subsidized by theGovernment. Since the launching of reform, Government was trying to

reduce its borrowing which means that further subsidization will not bepossible. There is one area where there is a need for private sector andforeign investment to come in. Because of the long gestation period, andmany other social problems, the infrastructure sector comparesunfavorably with manufacturing and many other sectors. For this, specific

policies in this area were need to make infrastructure attractive.Apparently, there was a broad gap between the potential demand forinfrastructure for high growth and the available supply. This was the


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challenge placed before the economy, i.e. before the public and privatesector and foreign investors. So liberalization occurs which came with lotof changes in government policies like:

1. dismantling of industrial licensing system built over the previous fourdecades;

2. reduction in physical restrictions on import; reduction also in the rate ofimport duties;

3. reduction in controls on foreign exchange, both current and capitalaccount;

4. reform of the financial system;5. reduction in the levels of personal and corporate taxation;6. reduction in restrictions on foreign investments (direst and portfolios);7. opening up of areas hitherto reserved for public sector units(with or

without passing on majority control to private shareholders);

8. partial privatization of PSUs9. softening of MRTP regulations; and10.Making various sectors of the Indian economy competitive on global

economic platform by making them produce quality goods in a costeffective manner.

In post liberalization period, infrastructure has been gone through manystages, government is trying to make its infrastructure superior so it hasdone lot of amendments in its policies while liberalization as:

Liberalization is like a boon for infrastructure sector as beforeinvestment by government were more and there were many restrictionsif any private company invests, so public investment in the nationsinfrastructure has been insufficient to develop the foundation for long-term growth. So liberalization gave relief to foreign investors byallowing 51% stake in high priority industries as well as by doing

banking and financial reforms and more than it offered manyimprovements to the NRIs to improve their foreign exchangeremittances. now the infrastructure sectors in India are expected to drawfunds of about US$ 345 billion during the 11th Five Year Plan whichmay offer investment opportunities. Visible failures are evident in thelack of power and potable water in large parts of India, poor roadconditions and cargo handling delays at ports and airports that aremanaged by government entities. By way of contrast, thetelecommunication sector has developed in leaps and bounds and one ofthe prime reasons for this difference is private participation in this sectoras opposed to primarily public sector participation in most other sectors.


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Before liberalization

There was subsequent policy changes of 1973, 1980, and 1985 emphasizedthe need for promoting competition in the domestic market andtechnological up gradation. The public sector was given a leading role inthe first and second 5-yr plans for setting up basic industries and

infrastructure facilities, because of scarcity of capital, the private sectorwas not assigned a substantive role in the development of infrastructurefacilities such as power, railway, steel, and other core sectors. For thefirst time in 1973, an attempt was made in industrial policy statement toallow investment from large industrial houses and foreign companies inhigh-priority industries. Small scale, tiny, and cottage industries werealso encouraged and given a bigger role in the development of industry.

It was in 1980 that the need was felt for promoting competition in Indian

industry by permitting import of technology and facilitating modernization.Again it was during this period that emphasis promotion got a big boost. Bythe end of the 6th plan, Indian industry had gained considerable competenceand it was able to meet the emerging challenges in the world economy.

Major participation of FDIs In Infrastructure sector

The importance of infrastructure sector also follows from the fact thatforeign investors are now seeking at infrastructural development as ayardstick for directing their investments. Mainly infrastructuraldevelopment had taken priority over wage levels in assessing theinvestment potential in developing countries. In India infrastructure sectorit has becoming an attractive investment area for FDIs. Already there is ahuge demand for funds from the manufacturing sector. On top of that isthe demand from the infrastructure sector. Both draw heavily from thesavings of the household sector. The growth of financial savings ofhousehold sector however is not rising fastly . In this regard, theimportance of rising obligation of domestic saving needs underscoring.

Finance for Infrastructure in India

Finance for infrastructure in India is mainly comes from governments statefunds, private organization and from foreign investments. before 1991, thereis only government who is investing more in infrastructure sectors, there arevery restrictions on private organizations.so Beginning with July 1991, the


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government introduced a number of changes in the country's regulatorypolicies. Among these, and particularly important from the point ofattracting foreign direct investments as we discussed above.The rules for government-owned infrastructure companies for raising fundsthrough initial share offerings are made flexible by the Securities andExchange Board of India(SEBI), which naturally will increase the flow ofinvestment in the Infrastructure of India. so from 1991 till now governmentshow a great interest in applying FDI more for the infrastructuraldevelopment. So the efforts of govt. give positive results and FDI inflowsare increased during the 9th Plan it was $ 3.2 billion ,during the 10th Plan itrose manifold to stand at $ 16.33 billion the annual average being $ 6.16

billion.The top five sectors which are attracting FDI in fiscal 2007-08 included :Services sector, Housing and Real Estate, Construction activities, ComputerSoftware & hardware, and Telecommunications.

The infrastructure sector that offers great potential to lure FDI witnessedmarked rise in FDI inflows during this five-year period.The extant policy for most of the infrastructure sectors allows FDI up to 100

percent on the automatic channel. foreign investment in India's infrastructuresector increased from $1902 million in fiscal 2001-02 to $ 2179 million in2006-07. But fiscal 2007-08 showed significant rise in the FDI inflows inthe infrastructure. In first nine months till December 2007 of fiscal 2007-08stood at $4095 million. Total foreign direct investments in India'sinfrastructure sector stood at $ 10575 million in 2000-01 to December 2007.

Sectors attracting highest FDI Equity Inflows (In Rs crore)

SECTOR 2005-06 2006-07 2007-08

2008-09

(April-Jan

'09)

Cumulative

(Apr.2000- Jan

2009)

% of total

inflows*

Services (Financial & non-

financial)

2399(543)

21047(4664)

26589(6615)

23045(5061)

78742(181189)

22%

Computer Software &

Hardware

6172(1375)

11786(2614)

5623(1410)

6944(1599)

39111(8876)

11%

Telecommunications2776(624)

2155(478)

5103(1261)

10797(2374)

27544(6216)

8%

Construction667(151)

4424(985)

6989(1743)

6224(1483)

19606(4646)

6%

Automobile630(143)

1254(276)

2697(675)

1792(441)

11648(2678)

4%

Housing and Real estate 171(38)

2121(467)

8749(2179)

10632(2408)

21794(5119)

6%

Power386(87)

713(157)

3875(967)

4079(924)

13709(3130)

4%

Metallurgical6540(147)

7866(173)

4686(1177)

3608(850)

10956(2613)

3%

Chemicals (Other than

fertilizers)

1731(390)

930(205)

920(229)

2561(579)

9442(2244)

2%

Petroleum & Natural Gas64(14)

401(89)

5729(1427)

1196(263)

8509(2043)

3%

Figures in bracket are in US$ million

* In terms of Rs.


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SOURCE: DIPP, Federal Ministry of Commerce and Industry, Government of India

FDI Inflows (as per international best practices)

FISCAL YEAR (APRIL-MARCH)

EQUITYReinvested

earnings+Other capital+

Total FDI

inflows

YOY growth

(%)

FIPB Route/

RBI'sAutomaticRoute/AcquisitionRoute

Equity capital ofunincorporated

bodies#

1991(August)-2000 (March) 15483 - - - 15483 -

2000-01 2339 61 1350 279 4029 -

2001-02 3904 191 1645 390 6130 (+) 52

2002-03 2574 190 1833 438 5035 (-) 18

2003-04 2197 32 1460 633 4322 (-) 14

2004-05 3250 528 1904 369 6051 (+) 40

2005-06 5540 435 2760 226 8961 (+) 48

2006-07 (P)* 15585 896 5828 517 22826 (+) 146

2007-08 (P)* 24575 2292 7168 327 34362 (+) 51

2008-09

(April-Dec)23885 334 3004 203 27426 -

Cumulative Total (From August

1991-January 2009)99332 4959 26952 3382 134625 -

SOURCE: DIPP, Federal Ministry of Commerce and Industry, Government of India

Foreign Collaboration Approvals in India

Foreign collaboration approvals are essentially of two types.

One involves only payments for technology and

the other is involving investment in the equity capital of an enterpriseexisting or to be promoted. With these foreign collaboration approvals,

probability of contract of foreign companies with Indian companies arevery high so that the paucity of capital is reduced and quality goods arealso provided to people which is a good sign.

If we talk about foreign collaboration approvals, then in these , Approvalsare accorded automatically in selected industries which are subject to foreignequity levels and payments for technology by the RBI. The upper limit for

automatic approval was raised from 51% to 74 percent(100% in case ofNRIs) in the notified industries in January 1997. The list of industries whichare opened for automatic approval was expanded simultaneously. In allother cases the government gives necessary permissions after a case by caseanalysis. The Industry Minister accords approval to projects involving a totalinvestment of up to Rs. 600 crores on the advice given by ForeignInvestment Promotion Board (FIPB) and for big projects the decisions aretaken by the Cabinet Committee on Foreign Investment (CCFI). As a result


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of the basic amendments and active promotion in home countries, thenumber of approved foreign collaborations increased sharply since 1991.The financial collaborations rose significantly from 289 in 1991 to 1559 in1997.

Table - 1Financial and Technical Collaborations: 1981 to 1996

Year No of approved collaboration

Financial technical total

% share of financialcollaboration intotal

Investmentapproves(rs. Cr.)

1991 289 661 950 30.42 534.1

1992 692 828 1520 45.53 3879.1

1993 785 6911476

53.18 8861.8

1994 1062 7921854

57.28 14190

1995 1355 9822337

57.98 32070

1996 1559 7442303

67.69 36.150

1997 1559 371

1289

71.22 32740

1991-july97

6660 506911729

56.78 128430

In terms of the amounts approved, the FIPB occupies a far more significantposition as compared to the RBI. While the RBI gave automatic approval innearly one-fourth of the financial collaboration cases, the foreign investmentassociated with these proposals was six per cent of the total investments

approved. But for the amendments in policy in January 1997, RBI approvalswould have accounted for far less. (RBI has since dispensed with theautomatic approval procedure and companies need only to report after issueof shares to foreign financial collaborators subject to the condition thatinvestments are made in the specified industries and are within the foreignshares allowed). In the context of the liberalization of industrial policy, it isthus important that much of the investment approved went through a formal

procedure of approval not like the automatic approval case where the


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investors may not be so conscious and serious. Also in the starting period,equity hikes by existing companies were approved automatically. It is onlyafter a lot of public criticism of the manner in which the hikes were affectedat prices considerably lower than the prevailing market prices, the termswere strictly tightened. The automatic procedure is, however, more effectivein technical collaboration agreements. Out of the 5,069 technicalcollaborations approved during till July 1997, the RBI granted 2,798 i.e.,nearly 55 per cent. At times one finds that while the investment approval isaccorded by the Government, approval for technical collaboration for thesame case is granted by the RBI.The relative significance of financial collaborations in the total approvalshas increased rapidly during the 'nineties. From about 10 to 15 per centduring the latter half of the `seventies, the financial collaborations (FCs)accounted for a little less than one-third ofthe total FC approvals towards the end of the `eighties. The share of the FCs

increased further since liberalization of industrial policy and exceeded halfof the total since 1993. During 1996 they accounted for two-thirds of thetotal i.e., double of their share in the late 'eighties.

Sectors which are going to call FDIs and thinking about

privatization

Railways infrastructure sector

The Indian Railway is known for one of the largest railway systems in theworld under a single management and manages more than 63,000 km ofrailway tracks. The financial outlay for the Indian Railway is vast enough to

present a budget distinct from the national budget. The railway which isknown for relatively efficient and inexpensive, is the most popular form oflong distance travel,but now in the past few years it has faced competitionfrom low budget airlines, which has decreased in the recent past due to highaviation fuel costs.

Since the Indian Railway has a monopoly in freight and passenger trainsthere is an enormous strain on the existing networks of rail tracks.

In view of this, the Government of India has decided to invest about $5billion to improve the rail routes in India. Moreover, the Indian Railway hasformulated a well-planned strategy to reduce bottlenecks and boost therailways capacity to match to the requirements.

The Government of India has also taken certain initiatives which includelow-cost and high-return investments with the more stress on, port


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connectivity, gauge conversion, signaling and telecom, renewal of asset andmodernization of passenger terminals..

Until now container transport was a monopoly of the public sector but thishas now been opened to competition and private companies in order toimprove infrastructure and subsequently encourage PPPs. According to this ,

the Rail Land Development Authority has been established recently toencourage and monitor PPP projects. The Indian Railway has offered over500 acres of land to private developer across the country for thedevelopment of railway stations, freight terminals and rail link projects. as ithas further has acknowledged about 22 railway stations which are to bemodernized under the PPP model of development.

Airports

Indian airports has handled approximately 95 million passengers and 1.5million tones of cargo in the last fiscal year witnessing a rise of more than30% in 2006-2007 over 2005-2006. Cargo traffic rise by about 11% over the

previous year. More clearly, Indias air traffic rise by 21.75% annuallybetween 2003 and 2007 and in the first three quarters of 2007 there has beena record hike of 37.74% in this sector, which is expected to lure US $30

billion by 2020.

In past, airports in India have been developed and operated by theGovernment till they were transferred to the Airports Authority of India in

1994. In 2003,India amended the Airports Authority of India Act, 1994 tofacilitate investments from the private sector in almost all areas of airportinfrastructure.

Airports are normally developed through concession agreements throughPPPs or we can say the Build-Own-Operate-Transfer (BOOT) model.

The government normally holds a 26% stake in joint ventures with theprivate sector, but recently developed two projects at Kolkatta and Chennaias wholly owned concerns.

The government is supposing investment by private companies at 25 cityairports, the Indian government has plans to market Indias rich heritage andnatural beauty to international leisure travelers. Consequently a high demandfor investments in aviation infrastructure is estimated to about US$ 9 billionfor airport development over the next 5 years.

Example:

A Greenfield airport is one where a private entity or a public-private jointventure builds and operates a new facility, entering into Build-Own-Transfer


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(BOT) contracts. although, Greenfield airports either in the public or privatesectors can be initiated only with the prior approval of the Government.

A Greenfield airport can be permitted both as a replacement for an existingairport or for simultaneous operation. The government permits 100% FDIfor Greenfield airports under the automatic route. Investments of more than

74% in other airport development ventures require the approval of theForeign Investment Promotion Board (FIPB). By the way of incentives,100% tax exemption for airport projects is granted for a period of 10 years.

With a view to taking corrective measures, the government has made itmandatory for all new Greenfield airports to provide separate cargo facilitiesthat include storage, ground handling and loading capabilities.

Highways and roads

India has an large road network of 3.3 million kms which is the secondlargest in the world. Though the roads in India carry about 65% of the

freight and 80% of passenger traffic, the quality and extent of the roads isnot adequate which are making it a priority sector for development.

Due to this reason the Government of India spends nearly US $ 4 billionannually on road development, and encourages private and foreigninvestments in this sector.

Private sector participation is rising and is usually through constructioncontracts/BOT models for about 36% of total investment, based oncompetitive bidding or the lowest total government investment involved.Developers or owners as the case may be are allowed to collect tolls onroads that are part of the National Highway Development Plan.

The National Highways Authority of India (NHAI) is the supremeGovernment body which overseas road development in the country that areunder the purview of the central government. The NHAI awards allcontracts, which are either for construction or BOT, through competitive

bidding.

government with an benefit to increase the investment in highways androads has granted a 100% income tax exemption for a period of 10 years forall road development projects. addition to this, the NHAI also considersgrants or viability gap funding for marginal projects. The government hasalso formulated model concession agreements.

Telecom


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The Telecom Regulatory Authority of India (TRAI) is defined the authoritythat regulates telecom and internet services in the country. In addition unlikeother sectors the telecom sector sees a balanced participation from both

public and private sector companies.

The Government of India permits 100% FDI in telecom equipment

manufacturing and a 74% -100% FDI for various other telecom services.With a view of creating a more efficient environment, the government hasappointed a committee to design a unified and single levy for the telecomsector, as the sector is currently burdened with additional taxes, charges andfees. Since the government predicts a 150% growth in the telecom sector,large amounts of investment opportunities of approximately $ 22 billion are

being offered to foreign and/ or private players.

Renewable energy

by recognizing the importance of alternate sources of energy, theGovernment of India has formed a distinct Ministry of Renewable Energythat develops policies and implements them with regard to rural energy,solar energy, wind power generation, the development of energy from wasteand rural village electrification among other things.

The main aim of the ministry is to develop and deploy new and renewableenergy to supplement the energy demand of the country that is not met bythe conventional sources of power.

The Government of India has also introduced various programs and schemesfor the benefit of villages and urban or semi-urban centers making Indiasinitiatives the worlds largest programme for renewable energy. a number ofinvestment opportunities in this sector has been created by the Ministry of

New and Renewable Energy.

Power

if we talk about power sector then India has the 5 th largest power generation

capacity in the world. Despite this and an exciting growth in investment inthe power sector, India still faces power shortages in major rural and urbanareas across the country. In India, a majority of electricity distribution andtransmission is owned by the PSU or state electricity boards however thereis rise in private sector participation in generation distribution. Largegeneration projects have been planned with the involvement of the privatesector.


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In power sector, the programmes for rural electrification receive financialsupport from the Rural Electrification Corporation under the Ministry ofPower(MOP) and the Power Finance Corporation(PFC) provides term-finance to projects in the power sector. An independent regulator, theCentral Electricity Regulatory Commission, addresses issues betweencentral public sector units and between states.

The Indian Government is keen on drawing private investment into thissector and offers 100% FDI in power generation, transmission anddistribution along with some benefits that include income tax exemption fora block of 10 years in the first 15 years of operation and a waiver of capitalgoods import duties on mega power projects. Increased private sector

participation is visible in the generation and distribution of power withseveral distribution licenses being held by the private sector.

In addition to above, nearly 150,000 MW hydroelectric power is yet to betapped in India and opportunities in power distribution through bidding forthe privatization of distribution is expected to materialize over the next 2-3years. With an approximate investment opportunity of about US$ 200 billionin the next seven years, the Government of India aims to complete itsambitious project Power for All project by 2012.

India Real Estate Investment

Indian Real Estate Investment has proven to be the highest yieldinginvestment opportunity in the recent few years. The realty industry in India

is at its zenith and is thereby luring the maximum investment not just locallybut overseas too. NRI Investments have taken a new turn and have enteredthe Indian real estate market.

The various Real Estate Developments in India include construction ofresidential units, townships, commercial complexes, office buildings andretail stores and shopping malls.The newest entrant is development of IT spaces that includes IT Parks andintegrated townships for the employees of the IT industry in that IT Park.

Many Banks and Financial Institutions for e.g. Kotak Mahindra RealtyFund, Dewan Housing Finance Limited-DHFL Venture Capital Fund, ,Kshitij Venture Capital Fund (A group venture of Pantaloon Retail IndiaLtd), HDFC Property Fund, and India Advantage Fund (ICICI) which

provide the funds for real estate development to the Builders and Developersfor construction of these structures. These are the major institutionalinvestors in real estate in India.The various factors responsible for the upswing in the Indian real estate


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investments are the increasing demand in residential, commercial andindustrial properties, Growth in hospitality or hotel industry, Developmentof IT and ITES industry, Development ofSpecial Economic Zones (SEZ),Increased living standards of people with higher disposable incomes.

These all reasons came out due to started liberalization process after 1991. Inthe liberalization process NRI remittances also improved, so incentives areoffered to NRIs to improve their foreign exchange remittances. NRI foreignexchange bank accounts, convertibility of foreign exchange in marketshares, foreign exchange gift schemes, and gold import policy and so onfacilitated an inflow of foreign exchange through NRIs. NRI investmentschemes announced by the govt. aimed at increasing inflow of foreigncapital through them. The second reason for rise in investments in real estatedevelopment is permission granted by the reserve bank of India to set upnew private banks and foreign exchange institutions were allowed to acquire

up to 20% stake in the equity of private sector banks while NRIs werepermitted up to 40% stake.The Government of India is also liberalizing byproviding more funds for real estate developments all across the country andrelaxing the economic policies. The various acts by the GOI in this regardare: Indian Transfer Of Property Act, Stamp Duty, Indian Registration Act,Foreign Exchange Regulation Act, 1973,1908,Indian Urban Land (CeilingAnd Regulation) Act, 1976, Rent Control Acts, Property Tax.Beside these the GOI interest in the real estate sector other investmentsdemanding mention are NRI Investments. NRI investment in real estatesegment in India have increased manifold. Special NRI cities are beingconstructed by the leading Real Estate Builders in and around, major citiesin India like Noida, Bangalore, Mumbai, Pune, Kolkata etc. A major chunkof the Foreign Direct Investments (FDI's) presently goes into the Indianrealty sector.Steps have been taken to manage and further promote real estate investmentin India. An Indian Real Estate Investment Trust (REIT) is being formedthat will facilitate fast and easy liquidation of investments in the real estatemarket in India. The Indian realty market is flooded with Initial PublicOffer (IPO) by various real estate and infrastructure development groups.

This is opening further avenues for investments in real estate in India.

Result

the major change in infrastructure comes after liberalization, beforeliberalization, infrastructure of India is in very poor state. After liberalizationa dramatic change occurred. In India infrastructure sector itself is becomingan attractive investment region for Foreign direct investments.


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the Indian Finance Ministry has given the permission of ForeignInstitutional Investors (FIIs) also to invest in unlisted companies forencouraging foreign funds flow into the Infrastructure in India,. FIIs nowcan invest 100% of their funds in the Infrastructure in India.

If we want core sector more attractive for FDI, the Cabinet Committee on

Foreign Investment (CCFI) has amended the 49 percent cap on foreignequity in the infrastructure sector to make fund mobilization simple. Thismajor policy decision which will implicitly raise the foreign equityinvestment in infrastructure sector to well over 51 per cent.

Along with it, even if allocation in the Infrastructure in India is increasedwith a more inflow of FDI and a large participation of private sector, theimmediate problem will still exist, since, infrastructure is subjected tolong gestation period. Consequently, the inadequacy of Infrastructure in

India will continue for quite some time, unless technology up gradationcan be done in the infrastructure production, including constructionactivities, for reducing the gestation lags and simultaneously improvingthe quality of products. With this infrastructure con any indiscriminategrowth may lead the economy of the country to a place of over-heatingand a further increase in inflation.

Under the Infrastructure in India the most important sector in which thereshould be development is in the urban infrastructure. Except for a fewlarge projects in a handful of cities, paucity of urban infrastructure

projects is a standing problem. Although city mass transport systems andairports have found place in developmental plans, essential services suchas roads, drinking water, sewerage management, drainage, and primaryhealth are still greatly under developed.

Until recently most Indian infrastructure was owned by the government,however private participation in public infrastructure has given a newimpetus to this sector. Several infrastructure services and projects aregoverned by concession agreements or contracts between thegovernment and/or public authorities and private entities. Theseagreements also address tariff determination and performance standardsthat are typically subject matters of independent regulation. In areas thatdo not have Model Concession Agreements and in view of an evolving

policy framework investors may be able to negotiate favorableinvestment structures. Going forward the Government should strive toestablish regulatory entities that are unaffected by political changes andoperate autonomously Throughout the process of establishing thisregulatory framework, it is paramount that the regulators are aware that


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it is important that consumer rights are protected by ensuring a highquality of service on cost effective terms. In order to minimize

bureaucratic autocracy, leading to more hurdles, it is necessary that theregulators and the apex regulatory department operate transparently andare made politically and financially accountable to the government andlegally accountable to the public through judicial review.

Conclusion:

After analyzing this term paper we conclude that India has done lot ofamendments in govt. policies to attract FDIs and to emphasize

privatization. but as well as India needs an investment of 475 billiondollars in infrastructure sector in the next 5 years to support 8% growth

in which 123-130 billion dollors of the investment requirement wouldcome from foreign investments. However, with the economy growing atmore than at the rate of 6 per cent, the government is aiming at aneconomic growth rate of 8 per cent for which the government is takingnecessary steps to develop the Infrastructure in India.

References

http://www.indiahousing.com/india-real-estate-investment.html http://isidev.nic.in/pdf/overview.PDF

http://business.mapsofindia.com/india-

budget/infrastructure/india.html

http://www.indiaonestop.com/FDI/FDI2.htm

http://www.asiatradehub.com/India/intro.asp

http://www.topnews.in/infrastructure-investment-india-s-

priority-maintain-economic-growth-p-chidambaram-27053

http://www.brijj.com/group/infrastructure-and-construction

Book: business environment: saleem sheikh
http://www.indiahousing.com/india-real-estate-investment.htmlhttp://isidev.nic.in/pdf/overview.PDFhttp://business.mapsofindia.com/india-budget/infrastructure/india.htmlhttp://business.mapsofindia.com/india-budget/infrastructure/india.htmlhttp://www.indiaonestop.com/FDI/FDI2.htmhttp://www.asiatradehub.com/India/intro.asphttp://www.topnews.in/infrastructure-investment-india-s-priority-maintain-economic-growth-p-chidambaram-27053http://www.topnews.in/infrastructure-investment-india-s-priority-maintain-economic-growth-p-chidambaram-27053http://www.brijj.com/group/infrastructure-and-constructionhttp://www.brijj.com/group/infrastructure-and-constructionhttp://www.indiahousing.com/india-real-estate-investment.htmlhttp://isidev.nic.in/pdf/overview.PDFhttp://business.mapsofindia.com/india-budget/infrastructure/india.htmlhttp://business.mapsofindia.com/india-budget/infrastructure/india.htmlhttp://www.indiaonestop.com/FDI/FDI2.htmhttp://www.asiatradehub.com/India/intro.asphttp://www.topnews.in/infrastructure-investment-india-s-priority-maintain-economic-growth-p-chidambaram-27053http://www.topnews.in/infrastructure-investment-india-s-priority-maintain-economic-growth-p-chidambaram-27053http://www.brijj.com/group/infrastructure-and-constructionhttp://www.brijj.com/group/infrastructure-and-construction


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investment in infrastructure in india eco Term Paper