India has taken action to de-risk infrastructure development

A triad of policy measures should boost infrastructure investment and help integrate our economy with global value chains

-  Rajesh Kumar Singh

Investment in infrastructure development by multilateral or bilateral financial institutions, be they private, domestic or foreign entities, is an ‘informed decision’ that hinges on a careful analysis of potential risks and expected returns. The risk spectrum is broad and spans political, administrative, regulatory and market-based adversities. Traditionally, public capital expenditure on the creation of public utilities has had only a limited assessment of risks and financial returns (also so of private investment in this field). However, a paradigm shift is underway as we move from sole reliance on public capex to incorporating private investment for infrastructure development. Therefore, promotional measures and de-risking strategies for investment have become crucial. The Indian government has encouraged private and foreign investment through various promotional measures, such as a liberal FDI policy, Ease of Doing Business