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Intermediation in infrastructure

November 03, 2008

 Abstract: In the last few years, with the right policies and regulatory framework for infrastructure falling into place, viable projects have begun to attract private investment including from global investors, making financing a nonissue. However, recently, global financial conditions have turned hostile, calling into question whether even the most viable projects will attract funding. At the same time, the prospects for a return to predominantly government financed infrastructure are bleak, because of fiscal considerations. Besides, the government’s past record of project implementation, service quality and maintenance standards has not been encouraging. So, till such time as the climate changes for the better, the government’s role should be to channel private investments into infrastructure, primarily by creating attractive opportunities for the now risk-averse foreign investors. The National Investment Fund (NIF) provides a mechanism for the government to fulfil this intermediary role between foreign investors and Indian infrastructure projects.

Keywords: infrastructure; National Investment Fund; foreign investors; equity; public investment, foreign investment

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