The government has started a programme to provide financial aid to pay project development costs for those made through public-private partnerships (PPPs).
The India Infrastructure Project Development Fund (IIPDF) programme was introduced by the finance ministry to help project sponsoring authorities (PSAs), including those in the Central and state governments, pay for the transaction advisors and consultants involved in the development of PPP projects.
The IIPDF initiative will help the PSAs build a portfolio of bankable, viable PPP projects as a central sector plan. The cash provided under this programme will be in addition to the already-in-effect Scheme for Financial Support to PPPs in Infrastructure, which was initially announced in December 2020 as a viability gap funding (VGF) programme.
Infrastructure PPP projects that are economically sound but commercially unviable are supported under the VGF programme.
The most recent action comes as the government launched an unprecedented infrastructure push in the wake of the pandemic to build enduring assets, promote employment, and boost economic growth while betting on its high-multiplier effect.
An April 2020 report by a government task force on the National Infrastructure Pipeline (NIP) projected capital expenditures of Rs. 111 lakh crore until FY25. Following the private sector (21%), the centre (39%) and the states (40%) are anticipated to have nearly equal shares in the implementation of the NIP. The government is preparing to increase the appeal of PPP projects by fiscal and other forms of support in order to draw in private partners.
