India has taken action to de-risk infrastructure development | Mint
Investment in infrastructure development by multilateral or bilateral financial institutions, be they private, domestic or foreign entities, is an ‘informed decision’ that hinges on a careful analysis of potential risks and expected returns. The risk spectrum is broad and spans political, administrative, regulatory and market-based adversities. Traditionally, public capital expenditure on the creation of public utilities has had only a limited assessment of risks and financial returns (also so of private investment in this field). However, a paradigm shift is underway as we move from sole reliance on public capex to incorporating private investment for infrastructure development. Therefore, promotional measures and de-risking strategies for investment have become crucial. The Indian government has encouraged private and foreign investment through various promotional measures, such as a liberal FDI policy, Ease of Doing Business measures like a National Single Window System, fiscal incentives, and the establishment of agencies like Invest India, among others. Alongside, a range of investment de-risking measures have also been introduced, leveraging technology, an integrated approach in planning, rationalized risk-sharing mechanisms, etc. The triad of PM Gati Shakti, Project Monitoring Group (PMG) and public private partnerships (PPP) forms the backbone of these de-risking measures.