Finance ministry urges identifying projects for private partnerships
ECONOMY & POLICY

Finance ministry urges identifying projects for private partnerships

The finance ministry has instructed infrastructure departments to locate projects that have the potential for execution through private partnership, as conveyed by an informed individual.

The intention behind this action is to attract a larger amount of private capital into public infrastructure and to minimise the setbacks in project execution. The individual mentioned that there will also be a focus on enhancing the flow of funds into sectors like urban infrastructure, railways, and roads. In these sectors, private participation is either minimal or falls short of being impressive.

For the current financial year, the ministry is planning to introduce a new architecture for public-private partnerships (PPPs) and a standard model concession agreement (MCA) framework for various infrastructure sectors.

As per the anonymous source, "Although the government has taken significant measures to increase capital expenditure in recent years, it is also important to involve private entities more, given the substantial funding requirements in the infrastructure sector."

The proposed MCA framework will function as a standard reference document for different infrastructure departments and government-run entities. It will provide them with the necessary flexibility to incorporate clauses that are specific to their respective sectors. The main focus will be on ensuring that the projects are financially viable and attractive to private investors.

This move comes at a time when there is a gradual resurgence in broader private investments, with senior industry executives anticipating a widespread recovery in the year 2023-24.

The government is also encouraging central public sector enterprises (CPSEs) to increase capital expenditure without any delays.

In April 2020, a government task force working on the National Infrastructure Pipeline (NIP) had projected capital investments amounting to Rs 111 trillion by 2024-25. The distribution was expected to be almost equal between the Centre (39%) and the states (40%), followed by the private sector (21%).

However, due to the pandemic, the revival of private investments was postponed as companies deferred their expansion plans. Consequently, the government significantly increased its capital expenditure to stimulate economic growth, banking on its substantial multiplier effect.

Also read: 
Honer Homes unveils Rs 30 bn mega project, Honer Signatis  
Provident Housing launches Rs 20 bn Sustainable Living Project 


The finance ministry has instructed infrastructure departments to locate projects that have the potential for execution through private partnership, as conveyed by an informed individual. The intention behind this action is to attract a larger amount of private capital into public infrastructure and to minimise the setbacks in project execution. The individual mentioned that there will also be a focus on enhancing the flow of funds into sectors like urban infrastructure, railways, and roads. In these sectors, private participation is either minimal or falls short of being impressive. For the current financial year, the ministry is planning to introduce a new architecture for public-private partnerships (PPPs) and a standard model concession agreement (MCA) framework for various infrastructure sectors. As per the anonymous source, Although the government has taken significant measures to increase capital expenditure in recent years, it is also important to involve private entities more, given the substantial funding requirements in the infrastructure sector. The proposed MCA framework will function as a standard reference document for different infrastructure departments and government-run entities. It will provide them with the necessary flexibility to incorporate clauses that are specific to their respective sectors. The main focus will be on ensuring that the projects are financially viable and attractive to private investors. This move comes at a time when there is a gradual resurgence in broader private investments, with senior industry executives anticipating a widespread recovery in the year 2023-24. The government is also encouraging central public sector enterprises (CPSEs) to increase capital expenditure without any delays. In April 2020, a government task force working on the National Infrastructure Pipeline (NIP) had projected capital investments amounting to Rs 111 trillion by 2024-25. The distribution was expected to be almost equal between the Centre (39%) and the states (40%), followed by the private sector (21%). However, due to the pandemic, the revival of private investments was postponed as companies deferred their expansion plans. Consequently, the government significantly increased its capital expenditure to stimulate economic growth, banking on its substantial multiplier effect. Also read:  Honer Homes unveils Rs 30 bn mega project, Honer Signatis  Provident Housing launches Rs 20 bn Sustainable Living Project 

Next Story
Infrastructure Energy

Digital Economy, Renewable Energy to Boost Job Creation: Economic Survey

The Economic Survey 2024-25, presented by Union Finance Minister Nirmala Sitharaman, indicates substantial improvement in India’s labour market, driven by strong post-pandemic recovery and formalisation of the workforce. Key findings include a significant drop in the unemployment rate from 6 per cent in 2017-18 to 3.2 per cent in 2023-24. Additionally, there has been notable growth in female labour force participation, which increased from 23.3 per cent in 2017-18 to 41.7 per cent in 2023-24.Other highlights include:Over 30.51 crore unorganised workers registered on the eShram portal, suppor..

Next Story
Real Estate

Aditya Birla Housing Finance Secures Rs 8.3 Billion from IFC

Aditya Birla Housing Finance Ltd. (ABHFL), a subsidiary of Aditya Birla Capital, has raised Rs 8.3 billion through non-convertible debentures (NCDs) from the International Finance Corporation (IFC). The company stated that the funds will be used to provide housing loans to low- and middle-income groups (LIG and MIG), with a special focus on promoting homeownership among women. Additionally, a portion of the investment will support MSMEs, particularly women-led enterprises, to drive economic growth. The initiative aims to strengthen financial inclusion and uplift underserved communities in the ..

Next Story
Infrastructure Energy

Bihar to Bid Out 2,400 MW Power Plant by March

The Bihar government plans to auction the proposed 2,400 MW coal-based power plant at Pirpainti by March 2025. Part of the state's FY25 budget initiatives, the project is valued at Rs 214 billion, covering multiple power sector developments. Coal for the plant is expected to come from Eastern Coalfields, with fuel and location already determined to streamline the bidding process. Discussions are underway to finalise coal supply under the SHAKTI scheme, with a resolution expected by February. The Central government has also pledged support for fast-tracking environmental clearances to facilit..

Hi There!

"Now get regular updates from CW Magazine on WhatsApp!

Join the CW WhatsApp channel for the latest news, industry events, expert insights, and project updates from the construction and infrastructure industry.

Click the link below to join"

+91 81086 03000