Ramesh Singh Test: Industry & Infrastructure- 2 - UPSC

1. Starting a business

2. Dealing with construction permits

3. Getting electricity

4. Registering property,

5. Getting credit,

6. Protecting minority investors,

7. Paying taxes,

8. Trading across borders,

9. Enforcing contracts,

10. Resolving insolvency, and

11. Labour market regulation.

• Make in India was launched in September 2014 by the Gol to encourage multinational as well as domestic companies to manufacture their products in India.

• The initiative is set to boost entrepreneurship, not only in manufacturing but in relevant infrastructure and service sectors as well.

• A Micro Units Development Refinance Agency (MUDRA) Bank set up to provide development and refinance to commercial banks/ NBFCs/cooperative banks for loans given to micro-units.

• MUDRA follows a 'credit-plus approach' by also providing several other services such as – financial literacy and addressing skill gaps, information gaps, etc.

• In December 2014, the Gol launched a new programme - IPDS (Integrated Power Development Scheme) - a centrally sponsored scheme (CSS) with a Central grant between 60 to 85 per cent.

• Its core aim is to attain 24x7 power supply in the country - to be achieved by strengthening sub-transmission network, metering, IT application, Customer Care Services, provisioning of solar panels, reduction in the AT&C of the state DISCOMs.

• By early 2017, few new initiatives are taken by the Gol - Bharatmala project to connect non-major ports; Backward Areas, Religious, Tourist Places Connectivity programme; Setu Bharatam Pariyojana to construct about 1500 major bridges; and the District Head Quarter Connectivity Scheme for development of about 9000 km newly declared NHS.

• The Gol has launched the Smart Cities Mission with the collaboration of states and UTs for urban development.

• The purpose of the mission is to drive economic growth and improve the quality of life of people by enabling local area development and harnessing technology, especially technology that leads to Smart outcomes.

• BOT-ANNUITY: This was an improvement over the BOT-TOLL model aimed at reversing the declining interest of the private companies towards road projects by manly reducing the risk for the private players. Other than sharing the project cost the private player was to build, maintain and operate the road projects without any responsibility of collecting toll on the traffic.

• EPC MODEL: The PPP model which seemed to be a better way out to promote the infra projects were visibly failing by the year 2010 and the Government was unable to attract the private players towards the road sector. It was in this backdrop that the Engineering-Procurement Construction (EPC) Model was announced. In this model, the project cost was fully covered by the Government (it means, it was not a PPP model and was like normal contracts given to the bidders) together with the majority of the risks— land acquisition, cost overruns due to delay, inflation and commercial. The private developers were supposed to design, construct and hand over the road projects to the government maintenance, operation and toll collection being the government's responsibilities.

HAM: Hybrid Annuity Model (HAM) is a mix of EPC and BOT-ANNUITY models. In this model, the project cost is shared by the government and the private player in the ratio of 40:60, respectively. The private player is responsible to construct and hand over the roads to the government which will collect toll (if wishes)—maintenance remaining the responsibility of the private player till the annuity period. The private player is paid a fixed sum of economic compensation (called 'annuity', similar to the BOT ANNUITY model of past) by the government for a fixed tenure (normally 15 years, though it is flexible). The private player which demands the lowest annuity (in bidding) gets the contract. In this model, most of the major risks are covered by the government—land acquisition, clearances, operation, toll collection and commercial while the risks related to inflation and cost overruns are shared in the ration of the project cost-sharing. But the private sector is still exposed to the construction and maintenance risks (delays from the government side in clearances and land acquisition have chances to enhance the degree of risks private players are exposed to). But overall, this is the best PPP model for the time devoid of most of the flaws of the past.