Infrastructure

INTRODUCTION #

Infrastructure development acts as the foun- dation for the economy to achieve higher rates of economic growth and development. Infrastructure can be broadly classified into two types: Social Infrastructure and Physical Infrastructure, Infra- structural facilities which support health, education, housing, sanitation, water supply etc., come under social Infrastructure. Eg: Schools, colleges, housing facilities, toilets, water tanks, hospitals, primary health centers etc. Facilities under transport and communication, bridges, dams etc are categorized as physical infrastructure. Eg: roads, railways, bridges, electricity, internet access, computer facility, ports, airports etc.

The Government of India since independence has prioritized building of necessary infrastructure for the country to tread on the path of development. There are various institutions established to support the process of infrastructure development, some of the institutions are:

Rajiv Gandhi Rural Housing Corporation Lim- ited (RGRHCL) is a government Company estab- lished by the Government of Karnataka to cater to the housing needs of the economically and socially weaker sections of the society. The main purposes of RGRHCL are:

1. To implement housing program through self- help for the economically and socially weak- er sections.
2. Ensure smooth flow of funds through ‘JUST

IN TIME’ fund releases.

• Organizing manufacture or bulk procurement of cost effective building materials and re-

covery of loan from the beneficiaries through a beneficiary – friendly system.

• Provide affordable housing for Economically Weaker Sections (EWS) throughout the State.
• Partnership with Grama Panchayats and NGOs.
• Provide choice to people in housing design, materials and technologies through self help.
• Promote cost-effective building technologies especially in rural areas through strengthen- ing of Nirmithi Kendras and establishing new Kendras.
• Raise resources and ensure recirculation of the funds.
• Promote sustainable housing program through encouraging beneficiaries to save for housing and repay housing loans.
• Women empowerment – selection of women

beneficiaries only.

1. Capacity building in Gram Panchayats through supporting housing projects spon- sored by Gram Panchayats.
2. Assistance to Occupational Groups in the EWS category like Beedi workers, Hamals, Weavers, Artisans, Fisher folk, Hawkers and Vegetable Sellers and
3. Public access to information regarding activ- ities of the company and implementation of housing projects.

Housing Development Finance Corporation (HDFC) was established in 1977 with the primary objective of meeting a social need of promoting home ownership by providing long-term finance

to households. HDFC was promoted with an initial share capital of Rs.l00 million. The primary objec- tive of HDFC is to enhance residential housing stock in the country through the provision of housing finance in a systematic and professional manner and to promote home ownership. Another objective is to increase the flow of resources to the housing sector by integrating the housing finance sector with the overall domestic financial markets.

National Housing Bank (NHB), the apex bank for Housing was established on July 09, 1988 under NHB Act 1987, as a wholly owned subsidiary of RBI with head quarters in New Delhi. The bank was set up with the main purpose of setting up of an institution to operate as a principal agency to promote housing finance institutions and to provide financial and other support to these institutions. NHB can raise sources by issue of bonds and debentures, borrowing from RBI under short term loans and long term operations, borrowing from Central government and other approved institutions. Its functions are:

1. Promotion and development of housing fi- nance institutions.
2. Refinance to banks and other housing finance institutions for credit facilities granted by them for housing.
3. Inspection of books of accounts of housing

finance institutions.

• Technical, administrative and advisory assis-

tance to housing finance institutions.

• Providing underwriting and guarantee facili- ties to housing finance institutions. Arranging financing and resources for institutions en- gaged in housing facilities.
• Advising Central and other government in the

matter of housing and housing finance.

• Collection and publication of information

and data relating to housing finance and

• Maintaining control over corporate housing

finance institutions.

The National Highways Authority of India (NHAI) was constituted by an act of Parliament, the National Highways Authority of India Act, 1988. It is responsible for the development, maintenance and management of National Highways entrusted to it and for matters connected with it. The Authority

was operationalised in Feb, 1995. NHAI is mandated to implement National Highways Development Project (NHDP) which is India’s largest ever highways project and world class roads with uninterrupted traffic flow.

National Hydroelectric Power Corporation Limited (NHPC), a Government of India enterprise, was established in the year 1975 with an authorized capital of Rs. 2000 million and with an objective to plan, promote and organize an integrated and efficient development of hydroelectric power in all aspects. Later on NHPC expanded its objectives to include other sources of energy like Geothermal, Tidal, and Wind etc.

POWERGRID Corporation of India Limited, one of the largest Transmission Utility in the world was incorporated in October, 1989 for the establish- ment and operation of regional and national power grids to facilitate transfer of electric power within and across the regions with reliability, security and economy on sound commercial principles.

INSTITUTIONAL FINANCE #

In the era of privatization, liberalization and globalization, institutional finance can play an important role in providing finance for’ infrastruc- tural development. It is a method for mobilizing private finance. Institutional finance is financing by a non-bank person of organization that trades securities in large enough share quantities or dollar amounts that they qualify for preferential treatment and lower commissions. Institutional investors face less protective regulations because it is assumed that they are more knowledgeable and better able to protect themselves.

Public Private Partnerships (PPPs) are gaining popularity especially in large infrastructural projects involving huge amount of finance and manpower. Any collaboration between public bodies and private companies or a cooperative venture between the pub- lic and private sectors, built on the expertise of each partner that best meets clearly defined public needs through appropriate allocation of risks, rewards and resources are called as Public Private Partnerships.

PPPs are encouraged:

1. To ensure government services are delivered in the most economical, effective and effi- cient manner.

• To create opportunities for private sector growth and to contribute to the overall eco- nomic development of the region through the stimulation of competitiveness and initiative and
• To ensure the best interests of the public, the business sector and the community are served through an appropriate allocation of risks and returns between partners.

PPP projects are of different types namely,

Operations and Management Contract: A private entity takes over the management of a state owned enterprise for a given period.

Operations and Management Contract with major capital expenditure: A private entity takes over the management of a state owned enterprise for a given period during which it also assumes signifi- cant investment risk. This category includes conces- sion type contracts such as Build-Transfer-Operate, Build-Lease- Operate, Build- Operate- Lease-Trans- fer, and Build-Rehabilitate-Operate- Transfer, as applied.

Greenfield Project: A PPP venture builds and operates a new facility. This category includes Build-own-Operate and Build-own-Transfer con- tracts as well as merchant power plants.

Divestiture: A private consortium buys an equity stake in a State-owned enterprise. The private stake may or may not involve private management of the company.

Regulatory bodies: Under the regime of Liber- alization, Privatization and Globalization the role of the government should be of regulating rather than controlling the economy. The government should become Umpire from empire. In this context, setting up of regulatory bodies and their effective function-

ing becomes most important for. the government. Following are the regulatory bodies in India are:

Telecommunication Regulatory Authority of India (TRAI): It regulates the telecommunication sector.

Central Electricity Regulatory Commission (CERC): It was constituted under the Electricity Regulatory Commissions Act, 1998 on 24th July, 1998.The Commission intends to promote com- petition, efficiency and economy in bulk power markets,’ improve the quality of supply, promote investments and advise government on the removal of institutional barriers to bridge the demand supply gap and thus foster the interests of consumers.

Atomic Energy Regulatory Board (AERB): The mission of the Board is to ensure that the use of ionizing radiation and nuclear energy in India does not cause undue risk to health and the environment. Currently, the Board consists of a full-time Chairman, an ex-officio member, three part-time members and a secretary, AERB is supported by the Safety Review Committee for Operating Plants (SARCOP), Safety Review Committee for Applications of Radiation (SARCAR) and Advisory Committees for Project Safety Review (ACPSRs) e.g, nuclear power pro- jects, light water reactor projects, waste management projects etc. ACPSRs recommend to AERB issuance of authorizations at different stages of a plant of the Department of Atomic Energy (DAE), after review- ing submission made by the plant authorities based on the recommendations of the associated Design Safety Committees. The SARCOP carries out safety surveillance and enforces safety stipulations in the operating units of the DAE, The SARCAR recommends measures to enforce radiation safety in medical industrial and research institutions which use radiation and radioactive sources.