Page 662 - ES 2020-21_Volume-1-2 [28-01-21]

Industry and Infrastructure 289

8.36 In India, private investment in infrastructure has come mainly in the form of Public-
Private Partnerships (PPPs). PPPs help in addressing the infrastructure gap as well as improve
efficiency in infrastructure service delivery.

8.37 The GoI set up the Public Private Partnership Appraisal Committee (PPPAC) responsible
for the appraisal of PPP projects in the Central sector. During FY20, PPPAC recommended
5 projects with total project cost of ` 4,321 crore. Out of these 5 projects, 4 are railway sector
projects (passenger train projects) and 1 is port sector project. In FY21, PPPAC recommended
7 projects with total project cost of ` 66,600.59 crore. Out of these 7 projects, 1 is a telecom
sector project, 3 are railway sector projects (2 station redevelopment projects & 1 passenger
train project), 2 are MHA sector projects (Eco-tourism projects) and 1 is port sector project.

8.38 In FY21, the GoI approved the continuation of the revamped Infrastructure Viability Gap
Funding (VGF) scheme till 2024-25. Revamping of the proposed VGF scheme will attract
more PPP projects and facilitate the private investment in the social sectors (Health, Education,
Waste Water, Solid Waste Management, Water Supply etc.). The revamped Scheme is mainly
related to introduction of the two sub-schemes for mainstreaming private participation in social
infrastructure (Box 7).

Box 7: Scheme in Viability Gap Funding (VGF)

Sub scheme -1 to cater to social sectors such as Waste Water Treatment, Water Supply, Solid Waste
Management, Health & Education sectors etc. The projects eligible under this category should have
at least 100 per cent operational cost recovery. The Central Government will provide maximum of
30 per cent of total project cost (TPC) of the project as VGF and State Government/Sponsoring
Central Ministry/Statutory Entity may provide additional support up to 30 per cent of TPC.

Sub scheme -2 to support demonstration/pilot social sectors projects. The projects may be from
health & education sectors where there is at least 50 per cent operational cost recovery. In such
projects, the Central Government and State Governments together will provide up to 80 per cent of
capital expenditure and upto 50 per cent of operation & maintenance costs for the first five years. The
Central Government will provide a maximum of 40 per cent of the TPC of the project. In addition,
it may provide a maximum of 25 per cent of operational costs of the project in first five years of
commercial operations.

Road Sector

8.39 India runs on the road, be it the passenger or goods movement, road transport is the
dominant mode of transportation in the country. The share of the transport sector in the GVA for
FY19 was about 4.6 per cent of which the share of road transport contributed roughly 67 per cent
(Figure 25).

8.40 The road network is the backbone of the transport system in India and it is very well
integrated with the multi-modal system of transportation, which provides crucial links with
airports, railway stations, ports, and other logistical hubs. With 63.86 lakh kms of rural-urban
roads and national-state highways, India is next only to the United States of America that has
a road network of 66.45 lakh km. With the proactive policy initiatives in the sector, the road
network has continuously been expanding in the country (Figure 26 and Figure 27).