Page 1 of 6

Journal for Studies in Management and Planning

Available at http://edupediapublications.org/journals/index.php/JSMaP/

ISSN: 2395-0463

Volume 04 Issue 03

March 2018

Available online: http://edupediapublications.org/journals/index.php/JSMaP/ P a g e | 404

Public private Partnership for Rural Infrastructure

Development in India

Keshari Nandan Mishra

Associate Professor, Department of History, H. N. B. Government P.G. College, Allahabad, Uttar

Pradesh, India

Abstract

Government of India has given attention towards the infrastructure development of the rural and

urban area. Government has given priority to the infrastructure development in the five year plan

but many constraints have resulted in slow growth of rural and urban infrastructure in India. Until

now investment in infrastructure sector has been largely the responsibility of the public sector in

India. Even during the current period of economic reform, started in 1991 the dismal state of rural

infrastructure has hardly shown any significant improvement. To improve the quality and coverage

of infrastructural services, the public sector should either make way for private and informal

providers or enter into partnerships with the private sector. Public private Partnership Model has

been one of the innovative approaches for development of infrastructure. This paper is an attempt

to analyze the important aspects of PPP for the development of rural Infrastructure in India, and to

understand the various schemes of Government for the infrastructure development.

Key Words: Collaboration, Joint project, Infrastructure project, Infrastructure investment

Introduction:

Slow agricultural growth is a concern for

policymakers as some two-thirds of India’s

people depend on rural employment for a

living. Current agricultural practices are

neither economically nor environmentally

sustainable and India's yields for many

agricultural commodities are low. Poorly

maintained irrigation systems and almost

universal lack of good extension services are

among the factors responsible. Farmers'

access to markets is hampered by poor roads,

rudimentary market infrastructure, and

excessive regulation.

– World Bank: "India Country Overview

2008"

While there is no single definition of PPPs,

they broadly refer to long-term, contractual

partnerships between the public and private

sector agencies, specifically targeted towards

financing, designing, implementing, and

operating infrastructure facilities and services

that were traditionally provided by the public

sector. These collaborative ventures are built

around the expertise and capacity of the

project partners and are based on a contractual

agreement, which ensures appropriate and

mutually agreed allocation of resources, risks,

and returns. This approach of developing and

operating public utilities and infrastructure by

the private sector under terms and conditions

agreeable to both the government and the

private sector is called PPP or P3 or Private

Sector participation (PSP).

According to "India: Priorities for

Agriculture and Rural Development" by

World Bank, India's large agricultural

subsidies are hampering productivity-

Page 2 of 6

Journal for Studies in Management and Planning

Available at http://edupediapublications.org/journals/index.php/JSMaP/

ISSN: 2395-0463

Volume 04 Issue 03

March 2018

Available online: http://edupediapublications.org/journals/index.php/JSMaP/ P a g e | 405

enhancing investment. Overregulation of

agriculture has increased costs, price risks and

uncertainty. Government interventions in

labor, land, and credit markets are hurting the

market. Infrastructure and services are

inadequate. Illiteracy, slow progress in

implementing land reforms and inadequate or

inefficient finance and marketing services for

farm produce.

The Government of India (the Government)

has emphasized the need for public–private

partnerships (PPPs) in addressing the

enormous infrastructure gaps in the country.

The Asian Development Bank (ADB) is

supporting the mainstreaming of PPPs

through lending and non lending projects in

India. With a view to bridging the

infrastructure deficit in the rural sector, the

Government and ADB agreed on the

objective, scope, implementation

arrangements, and financing plan for capacity

development technical assistance (TA) for a

flagship government scheme, Providing

Urban Amenities in Rural Areas (PURA).

Fact-finding missions were fielded in

November 2008 and January 2009. The TA is

in line with (i) ADB’s Country Strategy and

Program Update 2006–2008, (ii) ADB’s long- term strategic framework 2008–2020

(Strategy 2020) expectations for greater ADB

involvement in private sector development,

and (iii) Country Operations Business Plan

2008–2010.

Public Private Partnership:

The term “public partner” is used to designate

government agencies, as well as non- governmental institutions who receive

mandates and their financial resources

primarily from the state. Successful

cooperation is based on the partner’s mutual

acknowledgement of their diverging

legitimate goals, and mutually making use of

these goals. This is true also for development

partnerships between the state and the private

sector. Private companies necessarily

foreground their own particular interests: the

company’s success is the highest principle. In

contrast, public development cooperation

adopts a perspective that literally benefits the

public welfare, and is concerned about the

future of the social, economic, and ecological

whole. This is no contradiction, on the

contrary: these differing profiles can

complement each other.

Various forms of PPPs:

In practice, PPPs can take a wide range of

forms: a development agency combines its

knowledge with that of a private company

from the South (or the North) in order to

realise a joint project; a company is already

financing a project and seeks support from a

development agency; or a development

agency supports collaboration between a

private company and the Government of a

developing country. Depending on the

situation, the scale of a PPP can vary

considerably, ranging from infrastructural

projects worth millions down to small-scale

rural projects emerging from personal

relationships.

Issues:

Over 70% of the country’s population of over

1 billion people live in rural areas, and the

rural sector has a strong impact on India’s

economic growth, with agriculture and allied

activities averaging 5.0% growth (2004–

2008). Although this growth rate has fallen

sharply in FY2009, rural non-farm sector (i.e.,

rural services, manufacturing, utilities, and

construction) growth is still significantly

contributing to the gross domestic product. In

fact, agriculture and allied activities together

accounted for 17.8% of India's gross domestic

product in 2007–2008. Benefits of economic

Page 3 of 6

Journal for Studies in Management and Planning

Available at http://edupediapublications.org/journals/index.php/JSMaP/

ISSN: 2395-0463

Volume 04 Issue 03

March 2018

Available online: http://edupediapublications.org/journals/index.php/JSMaP/ P a g e | 406

growth in rural India are evidenced by a

reduced gap in urban and rural income levels,

from around $82 per person in 1990 to around

$56 in 2006–2007. The number of rural

households with annual incomes greater than

$2,000 in 2006–2007 was estimated at 56

million compared with 51 million of urban

households. However, over 250 million

people in rural areas still live below the

poverty line, and poor-quality infrastructure

in these areas inhibits overall growth of

India’s economy. Accordingly, rural

development initiatives for inclusive

economic growth and sustainable poverty

alleviation are key policy priorities of the

Government.

Rural Infrastructure and development:

Bharat Nirman:

This programme, launched in 2005-06 for

building infrastructure and basic amenities in

rural areas, has six components, namely, rural

housing, irrigation potential, drinking water,

rural roads, electrification and rural

telephony. Bharat Nirman has received an

outlay of Rs. 40,900 crore in the interim

budget for 2009-10 as against Rs. 31,280

crore (including NER component) in 2008-09.

Up to March 2009, a total length of

2,14,281.45 kilometres. Of roadworks has

been completed under the Pradhan Mantri

Gram Sadak Yojana (PMGSY) with a

cumulative expenditure of Rs. 46,807.21

crore. During 2008-09, against the total

allocation of Rs. 5,645.77 crore earmarked for

District Rural Development Agencies

(DRDAs) under the Indira Awaas Yojana

(IAY) for construction of 21.27 lakh houses,

Rs. 8,795.79 crore has been released till

March 31 2009 and 21.05 lakh houses have

been constructed during 2008-09. During

Bharat Nirman period, 55,067 uncovered and

about 3.31 lakh slipped-back habitations are

to be covered with provision of drinking

water facilities and 2.17 lakh quality affected

habitations are to be addressed for water

quality problems .Under Bharat Nirman for

rural water supply, Rs. 4,098 crore in 2005-

06, Rs. 4,560 crore in 2006-07 and Rs.

6,441.69 crore in 2007-08 has been utilized.

In 2008-09, a budgetary provision of Rs.

7,300 crore had been made out of which Rs.

7,276.29 crore (almost 100 per cent) has been

utilized. In order to give effect to the policy

initiatives mentioned in the Eleventh Five

Year Plan document, the guidelines for rural

water supply programme have been revised.

The revised programme is called the National

Rural Drinking Water Programme.

Rural sanitation:

There has also been tremendous increase in

the access to sanitation facilities by rural

households. The Total Sanitation Campaign

(TSC) is one of the eight flagship

programmes of the Government. TSC projects

have been sanctioned in 593 rural districts of

the country at a total outlay of Rs. 17,885

crore, with a Central share of Rs. 11,094

crore. The Central outlay for the Eleventh

Five Year Plan has been approved at Rs.

7,816 crore for TSC including Rs. 1,100 crore

for the Nirmal Gram Puraskar. The annual

budgetary support was gradually increased

from Rs. 202 crore in 2003-04 to Rs. 1,200

crore in 2008-09. To encourage the

Panchayati Raj Institutions (PRIs) to take up

sanitation promotion, the incentive scheme of

Nirmal Gram Puraskar (NGP) has been

launched. The award is given to those PRIs

which attain 100 per cent open defecation free

environment. With the scaling up of TSC,

combined with higher resources allocation,

the programme implementation has improved

substantially. Since 1999, over 5.56 crore

toilets have been provided for rural