The committee set up to recommend reviving the public-private partnership (PPP model) of infrastructure development has suggested that the government should encourage easier funding for construction projects with long gestation periods.
“PPPs are an important policy instrument that will enable India to compress time in this journey towards economic growth and development,” the Vijay Kelkar Committee said.
“A successful and growing stream of PPPs in infrastructure will go a long way in accelerating the country’s development process,” it said in its report to the Finance Ministry.
“The finance ministry should allow banks and financial institutions to issue zero coupon bonds, which will also help to achieve soft lending for user charges in infrastructure sector”, it said.
The government “must move the PPP model to the next level of maturity and sophistication” and foster trust between private and public sector partners in implementing PPP projects.
There should be provision for monetisation of viable projects which have stable revenue flows after engineering, procurement and construction delivery, the committee reported.