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
