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Infrastructure in India: The economics of transition from public to private provision

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  • Patel, Urjit R.
  • Bhattacharya, Saugata

Abstract

Indian infrastructure is in a state of flux. The provisioning of infrastructure services in India is steadily moving away from the realm of government to that of private sector. The critical issue has been getting economic structures right; in those sectors where there has been a recognition (and systemic implementation) of the principles of appropriate market structures, competition, and measured regulatory oversight, development has been rapid. The outcomes have varied by sector, with Indian telecom providing services that are globally cost-effective and electricity remaining a nightmare for consumers and a major bottleneck for India's continuing growth. While a few ports have significantly increased their efficiency, the ports sector overall remains behind international benchmarks. The initial remarkable spurt in the National Highways Development Project enabled (and probably to an extent, fuelled) growth, and brought in some of India's most innovative policy responses, but there has been a slowdown in momentum in expanding the programme. In recent years, there has simply not been the requisite (political) commitment to ownership of the innovation and motivation that is needed to sustain the pace of reform in key infrastructure sectors.

Suggested Citation

  • Patel, Urjit R. & Bhattacharya, Saugata, 2010. "Infrastructure in India: The economics of transition from public to private provision," Journal of Comparative Economics, Elsevier, vol. 38(1), pages 52-70, March.
    • Handle: RePEc:eee:jcecon:v:38:y:2010:i:1:p:52-70
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    References listed on IDEAS

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    1. Buiter, Willem & Patel, Urjit R., 2006. "India's Public Finances: Excessive Budget Deficits, a Government-Abused Financial System and Fiscal Rules," CEPR Discussion Papers 5502, C.E.P.R. Discussion Papers.
    2. Bhattacharya, Saugata & Patel, Urjit R., 2008. "The Power Sector in India: An Inquiry into the Efficacy of the Reform Process," India Policy Forum, National Council of Applied Economic Research, vol. 4(1), pages 211-283.
    3. Buiter Willem H. & Urjit R. Patel, 2006. "Excessive Budget Deficits, a Government-Abused Financial System, and Fiscal Rules," India Policy Forum, National Council of Applied Economic Research, vol. 2(1), pages 1-54.
    4. Irwin, Timothy & Klein, Michael & Perry, Guillermo E. & Thobani, Mateen, 1999. "Managing Government Exposure to Private Infrastructure Risks," The World Bank Research Observer, World Bank, vol. 14(2), pages 229-245, August.
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