Term paper of managerial economics on

Submitted to submitted by

Mrs. Vani mittal Manjit Paul

Reg.no:10902965

ACKNOWLEDGEMENT
Through my gratitude towards my supporters yet we like to add a few
hearts full for the people who were part of this term paper in
numerous ways. People who gave understanding support right project
ideas were conceived.
First of all I want to thank MRS.VANI MITTAL, Lecturer
MANAGERIAL ECONOMICS, lovely professional university,
phagwara for assigning this term paper & I also want to give hands
full gratitude to her for her help & guidance. I would like to thank all
the faculty of lovely school of business for having faith in me, & for
their kind inspiration and helping me whenever asked.
Last but not least, I expand my heartiest gratefulness all people who
have given me best wishes & all help that I needed for the completion
of the term paper.

MANJEET PAUL

CONTENTS
 Objective of term paper
 methodology
 Introduction
 liberalization is like a boon for infrastructure sector
 Major participation of FDIs In Infrastructure sector
 Finance for Infrastructure in India
 Foreign Collaboration Approvals
 Sectors which are going to call FDIs and thinking about
privatization
o Railways infrastructure sector
o highways and roads:
o airport
o power
o renewable energy
o India real estate investments

 Result
 Conclusion
 references
objective of term paper
This term paper is all about to analyze the investment in infrastructure after
liberalization, we will thoroughly study that what changes mainly occur
in Indian infrastructure and through which stages it goes through until
now. we will analyze that from where govt. arrange money for
infrastructural development and we will study the sectors which are
taking the liberalization benefits and the sectors which are going to raise
invention of private sector and FDIs. then we will discuss the result of
our analysis and then we will try to conclude our research.

Methodology

Methodology is defined as a particular procedure or set of procedures

used in finding the answers of problem or problems. For this there are to
types of data we use primary data and secondary data and we here use
primary as well as secondary data for the analysis of our term paper, we
have taken the help of internet literature for finding the analysis and also
taken the help of book business environment: saleem sheikh.

Introduction
Infrastructure in India goes through different stages .it is a very wide
term.it include mainly transportation, housing, water management,
industrial and commercial development telecommunications, , agriculture,
power, petroleum and natural gas, , real estate and other segments such as
mining, disaster management services, technology-related infrastructure.
Here we are discussing investments in infrastructure sector after
liberalization or in post liberalization period. In pre liberalization period,
the bulk of infrastructure was in the public sector. Public sector in India
operating in a protected set up which has been largely subsidized by the
Government. Since the launching of reform, Government was trying to
reduce its borrowing which means that further subsidization will not be
possible. There is one area where there is a need for private sector and
foreign investment to come in. Because of the long gestation period, and
many other social problems, the infrastructure sector compares
unfavorably with manufacturing and many other sectors. For this, specific
policies in this area were need to make infrastructure attractive.
Apparently, there was a broad gap between the potential demand for
infrastructure for high growth and the available supply. This was the
 challenge placed before the economy, i.e. before the public and private
sector and foreign investors. So liberalization occurs which came with lot
of changes in government policies like:

1. dismantling of industrial licensing system built over the previous four

decades;
2. reduction in physical restrictions on import; reduction also in the rate of
import duties;
3. reduction in controls on foreign exchange, both current and capital
account;
4. reform of the financial system;
5. reduction in the levels of personal and corporate taxation;
6. reduction in restrictions on foreign investments (direst and portfolios);
7. opening up of areas hitherto reserved for public sector units(with or
without passing on majority control to private shareholders);
8. partial privatization of PSUs
9. softening of MRTP regulations; and
10.Making various sectors of the Indian economy competitive on global
economic platform by making them produce quality goods in a cost
effective manner.

In post liberalization period, infrastructure has been gone through many

stages, government is trying to make its infrastructure superior so it has
done lot of amendments in its policies while liberalization as:

Liberalization is like a boon for infrastructure sector as before

investment by government were more and there were many restrictions
if any private company invests, so public investment in the nation’s
infrastructure has been insufficient to develop the foundation for long-
term growth. So liberalization gave relief to foreign investors by
allowing 51% stake in high priority industries as well as by doing
banking and financial reforms and more than it offered many
improvements to the NRIs to improve their foreign exchange
remittances. now the infrastructure sectors in India are expected to draw
funds of about US$ 345 billion during the 11th Five Year Plan which
may offer investment opportunities. Visible failures are evident in the
lack of power and potable water in large parts of India, poor road
conditions and cargo handling delays at ports and airports that are
managed by government entities. By way of contrast, the
telecommunication sector has developed in leaps and bounds and one of
the prime reasons for this difference is private participation in this sector
as opposed to primarily public sector participation in most other sectors.
Before liberalization

There was subsequent policy changes of 1973, 1980, and 1985 emphasized
the need for promoting competition in the domestic market and
technological up gradation. The public sector was given a leading role in
the first and second 5-yr plans for setting up basic industries and
infrastructure facilities, because of scarcity of capital, the private sector
was not assigned a substantive role in the development of infrastructure
facilities such as power, railway, steel, and other core sectors. For the
first time in 1973, an attempt was made in industrial policy statement to
allow investment from large industrial houses and foreign companies in
high-priority industries. Small scale, tiny, and cottage industries were
also encouraged and given a bigger role in the development of industry.

It was in 1980 that the need was felt for promoting competition in Indian
industry by permitting import of technology and facilitating modernization.
Again it was during this period that emphasis promotion got a big boost. By
the end of the 6th plan, Indian industry had gained considerable competence
and it was able to meet the emerging challenges in the world economy.
Major participation of FDIs In Infrastructure sector

The importance of infrastructure sector also follows from the fact that
foreign investors are now seeking at infrastructural development as a
yardstick for directing their investments. Mainly infrastructural
development had taken priority over wage levels in assessing the
investment potential in developing countries. In India infrastructure sector
it has becoming an attractive investment area for FDIs. Already there is a
huge demand for funds from the manufacturing sector. On top of that is
the demand from the infrastructure sector. Both draw heavily from the
savings of the household sector. The growth of financial savings of
household sector however is not rising fastly . In this regard, the
importance of rising obligation of domestic saving needs underscoring.

Finance for Infrastructure in India

Finance for infrastructure in India is mainly comes from government’s state

funds, private organization and from foreign investments. before 1991, there
is only government who is investing more in infrastructure sectors, there are
very restrictions on private organizations. so Beginning with July 1991, the
government introduced a number of changes in the country's regulatory
policies. Among these, and particularly important from the point of
attracting foreign direct investments as we discussed above.
The rules for government-owned infrastructure companies for raising funds
through initial share offerings are made flexible by the Securities and
Exchange Board of India(SEBI), which naturally will increase the flow of
investment in the Infrastructure of India. so from 1991 till now government
show a great interest in applying FDI more for the infrastructural
development. So the efforts of govt. give positive results and FDI inflows
are increased during the 9th Plan it was $ 3.2 billion ,during the 10th Plan it
rose manifold to stand at $ 16.33 billion the annual average being $ 6.16
billion.
The top five sectors which are attracting FDI in fiscal 2007-08 included :
Services sector, Housing and Real Estate, Construction activities, Computer
Software & hardware, and Telecommunications.
The infrastructure sector that offers great potential to lure FDI witnessed
marked rise in FDI inflows during this five-year period.
The extant policy for most of the infrastructure sectors allows FDI up to 100
percent on the automatic channel. foreign investment in India's infrastructure
sector increased from $1902 million in fiscal 2001-02 to $ 2179 million in
2006-07. But fiscal 2007-08 showed significant rise in the FDI inflows in
the infrastructure. In first nine months till December 2007 of fiscal 2007-08
stood at $4095 million. Total foreign direct investments in India's
infrastructure sector stood at $ 10575 million in 2000-01 to December 2007.

Sectors attracting highest FDI Equity Inflows (In Rs crore)

2008-09 Cumulative
% of total
SECTOR 2005-06 2006-07 2007-08 (April-Jan (Apr.2000- Jan
inflows*
'09) 2009)
Services (Financial & non- 2399 21047 26589 23045 78742
22%
financial) (543) (4664) (6615) (5061) (181189)
Computer Software & 6172 11786 5623 6944 39111
11%
Hardware (1375) (2614) (1410) (1599) (8876)
2776 2155 5103 10797 27544
Telecommunications 8%
(624) (478) (1261) (2374) (6216)
667 4424 6989 6224 19606
Construction 6%
(151) (985) (1743) (1483) (4646)
630 1254 2697 1792 11648
Automobile 4%
(143) (276) (675) (441) (2678)
171 2121 8749 10632 21794
Housing and Real estate 6%
(38) (467) (2179) (2408) (5119)
386 713 3875 4079 13709
Power 4%
(87) (157) (967) (924) (3130)
6540 7866 4686 3608 10956
Metallurgical 3%
(147) (173) (1177) (850) (2613)
Chemicals (Other than 1731 930 920 2561 9442
2%
fertilizers) (390) (205) (229) (579) (2244)
64 401 5729 1196 8509
Petroleum & Natural Gas 3%
(14) (89) (1427) (263) (2043)

Figures in bracket are in US$ million

* In terms of Rs.
 SOURCE: DIPP, Federal Ministry of Commerce and Industry, Government of India

FDI Inflows (as per international best practices)

Reinvested Total FDI YOY growth
EQUITY Other capital+
earnings+ inflows (%)
FIPB Route/
RBI's
FISCAL YEAR (APRIL-MARCH) Equity capital of
Automatic
unincorporated
Route/
bodies#
Acquisition
Route
1991(August)-2000 (March) 15483 - - - 15483 -
2000-01 2339 61 1350 279 4029 -
2001-02 3904 191 1645 390 6130 (+) 52
2002-03 2574 190 1833 438 5035 (-) 18
2003-04 2197 32 1460 633 4322 (-) 14
2004-05 3250 528 1904 369 6051 (+) 40
2005-06 5540 435 2760 226 8961 (+) 48
2006-07 (P)* 15585 896 5828 517 22826 (+) 146
2007-08 (P)* 24575 2292 7168 327 34362 (+) 51
2008-09
23885 334 3004 203 27426 -
(April-Dec)
Cumulative Total (From August
99332 4959 26952 3382 134625 -
1991-January 2009)

SOURCE: DIPP, Federal Ministry of Commerce and Industry, Government of India

Foreign Collaboration Approvals in India

Foreign collaboration approvals are essentially of two types.
 One involves only payments for technology and
 the other is involving investment in the equity capital of an enterprise
existing or to be promoted. With these foreign collaboration approvals,
probability of contract of foreign companies with Indian companies are
very high so that the paucity of capital is reduced and quality goods are
also provided to people which is a good sign.

If we talk about foreign collaboration approvals, then in these , Approvals

are accorded automatically in selected industries which are subject to foreign
equity levels and payments for technology by the RBI. The upper limit for
automatic approval was raised from 51% to 74 percent(100% in case of
NRIs) in the notified industries in January 1997. The list of industries which
are opened for automatic approval was expanded simultaneously. In all
other cases the government gives necessary permissions after a case by case
analysis. The Industry Minister accords approval to projects involving a total
investment of up to Rs. 600 crores on the advice given by Foreign
Investment Promotion Board (FIPB) and for big projects the decisions are
taken by the Cabinet Committee on Foreign Investment (CCFI). As a result
of the basic amendments and active promotion in home countries, the
number of approved foreign collaborations increased sharply since 1991.
The financial collaborations rose significantly from 289 in 1991 to 1559 in
1997.

Table - 1
Financial and Technical Collaborations: 1981 to 1996

Year No of approved collaboration % share of Investment

financial approves(rs. Cr.)
Financial technical total collaboration in
total
1991 289 661 950 30.42 534.1
1992 692 828 1520 45.53 3879.1
1993 785 691 53.18 8861.8
1476
1994 1062 792 57.28 14190
1854
1995 1355 982 57.98 32070
2337
1996 1559 744 67.69 36.150
2303
1997 1559 371 71.22 32740
1289
1991- 6660 5069 56.78 128430
july 11729
‘97

In terms of the amounts approved, the FIPB occupies a far more significant
position as compared to the RBI. While the RBI gave automatic approval in
nearly one-fourth of the financial collaboration cases, the foreign investment
associated with these proposals was six per cent of the total investments
approved. But for the amendments in policy in January 1997, RBI approvals
would have accounted for far less. (RBI has since dispensed with the
automatic approval procedure and companies need only to report after issue
of shares to foreign financial collaborators subject to the condition that
investments are made in the specified industries and are within the foreign
shares allowed). In the context of the liberalization of industrial policy, it is
thus important that much of the investment approved went through a formal
procedure of approval not like the automatic approval case where the
investors may not be so conscious and serious. Also in the starting period,
equity hikes by existing companies were approved automatically. It is only
after a lot of public criticism of the manner in which the hikes were affected
at prices considerably lower than the prevailing market prices, the terms
were strictly tightened. The automatic procedure is, however, more effective
in technical collaboration agreements. Out of the 5,069 technical
collaborations approved during till July 1997, the RBI granted 2,798 i.e.,
nearly 55 per cent. At times one finds that while the investment approval is
accorded by the Government, approval for technical collaboration for the
same case is granted by the RBI.
The relative significance of financial collaborations in the total approvals
has increased rapidly during the 'nineties. From about 10 to 15 per cent
during the latter half of the `seventies, the financial collaborations (FCs)
accounted for a little less than one-third of
the total FC approvals towards the end of the `eighties. The share of the FCs
increased further since liberalization of industrial policy and exceeded half
of the total since 1993. During 1996 they accounted for two-thirds of the
total i.e., double of their share in the late 'eighties.

Sectors which are going to call FDIs and thinking about

privatization
 Railways infrastructure sector

The Indian Railway is known for one of the largest railway systems in the
world under a single management and manages more than 63,000 km of
railway tracks. The financial outlay for the Indian Railway is vast enough to
present a budget distinct from the national budget. The railway which is
known for relatively efficient and inexpensive, is the most popular form of
long distance travel, but now in the past few years it has faced competition
from low budget airlines, which has decreased in the recent past due to high
aviation fuel costs.
Since the Indian Railway has a monopoly in freight and passenger trains
there is an enormous strain on the existing networks of rail tracks.
In view of this, the Government of India has decided to invest about $5
billion to improve the rail routes in India. Moreover, the Indian Railway has
formulated a well-planned strategy to reduce bottlenecks and boost the
railways capacity to match to the requirements.
The Government of India has also taken certain initiatives which include
low-cost and high-return investments with the more stress on, port
connectivity, gauge conversion, signaling and telecom, renewal of asset and
modernization of passenger terminals..
Until now container transport was a monopoly of the public sector but this
has now been opened to competition and private companies in order to
improve infrastructure and subsequently encourage PPPs. According to this ,
the Rail Land Development Authority has been established recently to
encourage and monitor PPP projects. The Indian Railway has offered over
500 acres of land to private developer across the country for the
development of railway stations, freight terminals and rail link projects. as it
has further has acknowledged about 22 railway stations which are to be
modernized under the PPP model of development.

 Airports

Indian airports has handled approximately 95 million passengers and 1.5

million tones of cargo in the last fiscal year witnessing a rise of more than
30% in 2006-2007 over 2005-2006. Cargo traffic rise by about 11% over the
previous year. More clearly, India’s air traffic rise by 21.75% annually
between 2003 and 2007 and in the first three quarters of 2007 there has been
a record hike of 37.74% in this sector, which is expected to lure US $30
billion by 2020.
In past, airports in India have been developed and operated by the
Government till they were transferred to the Airports Authority of India in
1994. In 2003,India amended the Airports Authority of India Act, 1994 to
facilitate investments from the private sector in almost all areas of airport
infrastructure.
Airports are normally developed through concession agreements through
PPPs or we can say the Build-Own-Operate-Transfer (BOOT) model.
The government normally holds a 26% stake in joint ventures with the
private sector, but recently developed two projects at Kolkatta and Chennai
as wholly owned concerns.
The government is supposing investment by private companies at 25 city
airports, the Indian government has plans to market India’s rich heritage and
natural beauty to international leisure travelers. Consequently a high demand
for investments in aviation infrastructure is estimated to about US$ 9 billion
for airport development over the next 5 years.
Example:
A Greenfield airport is one where a private entity or a public-private joint
venture builds and operates a new facility, entering into Build-Own-Transfer
(BOT) contracts. although, Greenfield airports either in the public or private
sectors can be initiated only with the prior approval of the Government.
A Greenfield airport can be permitted both as a replacement for an existing
airport or for simultaneous operation. The government permits 100% FDI
for Greenfield airports under the automatic route. Investments of more than
74% in other airport development ventures require the approval of the
Foreign Investment Promotion Board (FIPB). By the way of incentives,
100% tax exemption for airport projects is granted for a period of 10 years.
With a view to taking corrective measures, the government has made it
mandatory for all new Greenfield airports to provide separate cargo facilities
that include storage, ground handling and loading capabilities.
 Highways and roads
India has an large road network of 3.3 million kms which is the second
largest in the world. Though the roads in India carry about 65% of the
freight and 80% of passenger traffic, the quality and extent of the roads is
not adequate which are making it a priority sector for development.
Due to this reason the Government of India spends nearly US $ 4 billion
annually on road development, and encourages private and foreign
investments in this sector.
Private sector participation is rising and is usually through construction
contracts/BOT models for about 36% of total investment, based on
competitive bidding or the lowest total government investment involved.
Developers or owners as the case may be are allowed to collect tolls on
roads that are part of the National Highway Development Plan.
The National Highways Authority of India (NHAI) is the supreme
Government body which overseas road development in the country that are
under the purview of the central government. The NHAI awards all
contracts, which are either for construction or BOT, through competitive
bidding.
government with an benefit to increase the investment in highways and
roads has granted a 100% income tax exemption for a period of 10 years for
all road development projects. addition to this, the NHAI also considers
grants or viability gap funding for marginal projects. The government has
also formulated model concession agreements.

 Telecom
The Telecom Regulatory Authority of India (TRAI) is defined the authority
that regulates telecom and internet services in the country. In addition unlike
other sectors the telecom sector sees a balanced participation from both
public and private sector companies.
The Government of India permits 100% FDI in telecom equipment
manufacturing and a 74% -100% FDI for various other telecom services.
With a view of creating a more efficient environment, the government has
appointed a committee to design a unified and single levy for the telecom
sector, as the sector is currently burdened with additional taxes, charges and
fees. Since the government predicts a 150% growth in the telecom sector,
large amounts of investment opportunities of approximately $ 22 billion are
being offered to foreign and/ or private players.

 Renewable energy

by recognizing the importance of alternate sources of energy, the

Government of India has formed a distinct Ministry of Renewable Energy
that develops policies and implements them with regard to rural energy,
solar energy, wind power generation, the development of energy from waste
and rural village electrification among other things.
The main aim of the ministry is to develop and deploy new and renewable
energy to supplement the energy demand of the country that is not met by
the conventional sources of power.
The Government of India has also introduced various programs and schemes
for the benefit of villages and urban or semi-urban centers making India’s
initiatives the world’s largest programme for renewable energy. a number of
investment opportunities in this sector has been created by the Ministry of
New and Renewable Energy.
 Power

if we talk about power sector then India has the 5th largest power generation
capacity in the world. Despite this and an exciting growth in investment in
the power sector, India still faces power shortages in major rural and urban
areas across the country. In India, a majority of electricity distribution and
transmission is owned by the PSU or state electricity boards however there
is rise in private sector participation in generation distribution. Large
generation projects have been planned with the involvement of the private
sector.
In power sector, the programmes for rural electrification receive financial
support from the Rural Electrification Corporation under the Ministry of
Power(MOP) and the Power Finance Corporation(PFC) provides term-
finance to projects in the power sector. An independent regulator, the
Central Electricity Regulatory Commission, addresses issues between
central public sector units and between states.
The Indian Government is keen on drawing private investment into this
sector and offers 100% FDI in power generation, transmission and
distribution along with some benefits that include income tax exemption for
a block of 10 years in the first 15 years of operation and a waiver of capital
goods import duties on mega power projects. Increased private sector
participation is visible in the generation and distribution of power with
several distribution licenses being held by the private sector.
In addition to above, nearly 150,000 MW hydroelectric power is yet to be
tapped in India and opportunities in power distribution through bidding for
the privatization of distribution is expected to materialize over the next 2-3
years. With an approximate investment opportunity of about US$ 200 billion
in the next seven years, the Government of India aims to complete its
ambitious project “Power for All” project by 2012.
 India Real Estate Investment

Indian Real Estate Investment has proven to be the highest yielding

investment opportunity in the recent few years. The realty industry in India
is at its zenith and is thereby luring the maximum investment not just locally
but overseas too. NRI Investments have taken a new turn and have entered
the Indian real estate market.

The various Real Estate Developments in India include construction of

residential units, townships, commercial complexes, office buildings and
retail stores and shopping malls.
The newest entrant is development of IT spaces that includes IT Parks and
integrated townships for the employees of the IT industry in that IT Park.
Many Banks and Financial Institutions for e.g. Kotak Mahindra Realty
Fund, Dewan Housing Finance Limited-DHFL Venture Capital Fund, ,
Kshitij Venture Capital Fund (A group venture of Pantaloon Retail India
Ltd), HDFC Property Fund, and India Advantage Fund (ICICI) which
provide the funds for real estate development to the Builders and Developers
for construction of these structures. These are the major institutional
investors in real estate in India.
The various factors responsible for the upswing in the Indian real estate
investments are the increasing demand in residential, commercial and
industrial properties, Growth in hospitality or hotel industry, Development
of IT and ITES industry, Development of Special Economic Zones (SEZ),
Increased living standards of people with higher disposable incomes.

These all reasons came out due to started liberalization process after 1991. In
the liberalization process NRI remittances also improved, so incentives are
offered to NRIs to improve their foreign exchange remittances. NRI foreign
exchange bank accounts, convertibility of foreign exchange in market
shares, foreign exchange gift schemes, and gold import policy and so on
facilitated an inflow of foreign exchange through NRIs. NRI investment
schemes announced by the govt. aimed at increasing inflow of foreign
capital through them. The second reason for rise in investments in real estate
development is permission granted by the reserve bank of India to set up
new private banks and foreign exchange institutions were allowed to acquire
up to 20% stake in the equity of private sector banks while NRIs were
permitted up to 40% stake. The Government of India is also liberalizing by
providing more funds for real estate developments all across the country and
relaxing the economic policies. The various acts by the GOI in this regard
are: Indian Transfer Of Property Act, Stamp Duty, Indian Registration Act,
Foreign Exchange Regulation Act, 1973,1908,Indian Urban Land (Ceiling
And Regulation) Act, 1976, Rent Control Acts, Property Tax.
Beside these the GOI interest in the real estate sector other investments
demanding mention are NRI Investments. NRI investment in real estate
segment in India have increased manifold. Special NRI cities are being
constructed by the leading Real Estate Builders in and around, major cities
in India like Noida, Bangalore, Mumbai, Pune, Kolkata etc. A major chunk
of the Foreign Direct Investments (FDI's) presently goes into the Indian
realty sector.
Steps have been taken to manage and further promote real estate investment
in India. An Indian Real Estate Investment Trust (REIT) is being formed
that will facilitate fast and easy liquidation of investments in the real estate
market in India. The Indian realty market is flooded with Initial Public
Offer (IPO) by various real estate and infrastructure development groups.
This is opening further avenues for investments in real estate in India.

Result
the major change in infrastructure comes after liberalization, before
liberalization, infrastructure of India is in very poor state. After liberalization
a dramatic change occurred. In India infrastructure sector itself is becoming
an attractive investment region for Foreign direct investments.
 the Indian Finance Ministry has given the permission of Foreign
Institutional Investors (FIIs) also to invest in unlisted companies for
encouraging foreign funds flow into the Infrastructure in India,. FIIs now
can invest 100% of their funds in the Infrastructure in India.

If we want core sector more attractive for FDI, the Cabinet Committee on
Foreign Investment (CCFI) has amended the 49 percent cap on foreign
equity in the infrastructure sector to make fund mobilization simple. This
major policy decision which will implicitly raise the foreign equity
investment in infrastructure sector to well over 51 per cent.

Along with it, even if allocation in the Infrastructure in India is increased

with a more inflow of FDI and a large participation of private sector, the
immediate problem will still exist, since, infrastructure is subjected to
long gestation period. Consequently, the inadequacy of Infrastructure in
India will continue for quite some time, unless technology up gradation
can be done in the infrastructure production, including construction
activities, for reducing the gestation lags and simultaneously improving
the quality of products. With this infrastructure con any indiscriminate
growth may lead the economy of the country to a place of over-heating
and a further increase in inflation.

Under the Infrastructure in India the most important sector in which there
should be development is in the urban infrastructure. Except for a few
large projects in a handful of cities, paucity of urban infrastructure
projects is a standing problem. Although city mass transport systems and
airports have found place in developmental plans, essential services such
as roads, drinking water, sewerage management, drainage, and primary
health are still greatly under developed.

Until recently most Indian infrastructure was owned by the government,

however private participation in public infrastructure has given a new
impetus to this sector. Several infrastructure services and projects are
governed by concession agreements or contracts between the
government and/or public authorities and private entities. These
agreements also address tariff determination and performance standards
that are typically subject matters of independent regulation. In areas that
do not have Model Concession Agreements and in view of an evolving
policy framework investors may be able to negotiate favorable
investment structures. Going forward the Government should strive to
establish regulatory entities that are unaffected by political changes and
operate autonomously Throughout the process of establishing this
regulatory framework, it is paramount that the regulators are aware that
 it is important that consumer rights are protected by ensuring a high
quality of service on cost effective terms. In order to minimize
bureaucratic autocracy, leading to more hurdles, it is necessary that the
regulators and the apex regulatory department operate transparently and
are made politically and financially accountable to the government and
legally accountable to the public through judicial review.

Conclusion:
After analyzing this term paper we conclude that India has done lot of
amendments in govt. policies to attract FDIs and to emphasize
privatization. but as well as India needs an investment of 475 billion
dollars in infrastructure sector in the next 5 years to support 8% growth
in which 123-130 billion dollors of the investment requirement would
come from foreign investments. However, with the economy growing at
more than at the rate of 6 per cent, the government is aiming at an
economic growth rate of 8 per cent for which the government is taking
necessary steps to develop the Infrastructure in India.

References
 http://www.indiahousing.com/india-real-estate-investment.html
 http://isidev.nic.in/pdf/overview.PDF
 http://business.mapsofindia.com/india-
budget/infrastructure/india.html
 http://www.indiaonestop.com/FDI/FDI2.htm
 http://www.asiatradehub.com/India/intro.asp
 http://www.topnews.in/infrastructure-investment-india-s-
priority-maintain-economic-growth-p-chidambaram-27053
 http://www.brijj.com/group/infrastructure-and-
construction
 Book: business environment: saleem sheikh