Removing infrastructure bottlenecks

Abstract

With high rates of economic growth and low public sector investment, India’s infrastructure is in short supply and potentially a major constraint on future growth. To alleviate fiscal constraints and improve infrastructure productivity, the government is turning increasingly to the private sector to finance and run infrastructure projects. In some infrastructure sectors in which the regulatory environment is conducive to private sector involvement, performance has improved significantly. However, although infrastructure policy is moving in the right direction in some sectors, there are still a number of ways in which the regulatory environment could be improved further. This chapter outlines a range of policy initiatives that would increase private sector participation and improve infrastructure service delivery to international standards. It begins by discussing the role of public-private partnerships in the provision of infrastructure services before moving on to review the regulatory environment in a number of infrastructure sectors with a focus on regulatory settings that constrain competition. With high rates of economic growth and low public sector investment, India’s infrastructure is in short supply and potentially a major constraint on future growth. To alleviate fiscal constraints and improve infrastructure productivity, the government is turning increasingly to the private sector to finance and run infrastructure projects. In some infrastructure sectors in which the regulatory environment is conducive to private sector involvement, performance has improved significantly. However, although infrastructure policy is moving in the right direction in some sectors, there are still a number of ways in which the regulatory environment could be improved further. This chapter outlines a range of policy initiatives that would increase private sector participation and improve infrastructure service delivery to international standards. It begins by discussing the role of public-private partnerships in the provision of infrastructure services before moving on to review the regulatory environment in a number of infrastructure sectors with a focus on regulatory settings that constrain competition.