http://www.economist.com/news/finance-and-economics/21568397-indias-love-affair-public-private-partnerships-faces-stern-test-rippp
India in the past 4 years has been trying to increase its infastructure and benefits to the society by placing more emphasis on private sector investment. Although seemingly a wonderful idea the private sector has been over bidding on contracts and investing way to much capital into these projects that will very rarely turn a profit due its public nature and its inability to generate a gain. Between 2007 and 2012 there was a combined total of 225 billion dollars put into the system from the private sector, equivelent to 12 percent of GDP in 2012. Many of these infastructures are losing value however with the pipeline projects in the past year have lost 52 percent of their value, causing many of the people who were tempted to try and invest in these infastructures are skeptical and this economy needs the new infastructure to create the new economy that they need without the help from the public governments constant struggles to get anything going.
2 comments:
I am from India and I think Travis is right in all aspects. The biggest problem facing infrastructure development is the public nature of the task. This allows for room for Government corruption.
Government corruption seems to be a problem that third world countries would face for several years to come. Infrastructure in India would seem like the best place to invest your money seeing as the population keeps increasing as the years go by.i am curious to find out more on how exactly the government in particular is handling the future issues of over population and how it can affect India's economy.
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