Ensuring community participation is key to inclusive economic growth and social reforms. A social equity model based on public-private partnerships that includes local communities as partners can help make growth more inclusive. Such a model establishes collaborative community structures on the ground to ensure social equity along with infrastructure growth. It leverages the public sector's delivery capabilities, private sector expertise, and creates an institutional structure to promote awareness. Financing is easier when the government, corporations and community all take part in the infrastructure value chain.

1. ENSURING COMMUNITY PARTICIPATION FOR INCLUSIVE GROWTH

2. KEY TO ECONOMIC GROWTH AND SOCIAL REFORMS
2
Polity &
Leadership
Liberalized
Policies &
Regulatory
Framework
Private
Partnerships
Access to finance
& global capital
markets
Availability of
Natural
Resources &
Skilled
Manpower
Community
Engagement
Pillars for
Infrastructure
Development

3. DEFINING PPP IN INFRASTRUCTURE
3
A precise definition of a PPP for infrastructure is elusive, as it refers to a broad range of deal structures
and asset types
The easiest way to understand a PPP is as a legally binding contract between a public sector entity and a
private company—typically referred to as a concessionaire—where the partners agree to share some
portion of the risks and rewards inherent in an infrastructure project
In the most advanced PPP markets this risk and reward sharing structure more narrowly refers to
agreements where the private sector designs, builds, finances, operates, and maintains (also known as
DBFOM) an infrastructure asset for a pre-determined period of time
In exchange, the public sector provides a recurring payment based on the condition of the asset (known as
an availability payment) or allows the private sector to collect tolls or fees generated from the project

4. COMPLEXITY OF PPP MODELS DELIVERS LONG-TERM SAVINGS
4
PPPs for infrastructure are complicated models
They require robust economic analysis, complex negotiations, intense public scrutiny, long-term
commitments, political leadership, and force public sector employees and policymakers to hone a relatively
new skill set
PPPs are rarely the lowest-cost way to procure infrastructure for several reasons
transaction costs for PPPs are usually higher than traditional bid-build contracts
private sector borrowing costs are generally higher than those available to the public sector
Despite these limitations, a well-structured PPP can deliver better value for the public money
The private sector is less tolerant of cost overruns and project delays than the public sector
Transferring construction, operational, and/or demand risk to the private sector can result in quantifiable
savings for the public sector
PPPs are also a an efficient way for the public sector to monetize or improve untapped governmental
assets, without ceding public ownership

5. PUBLIC PRIVATE PARTNERSHIPS
5
Mentioning PPP in the Indian context mostly elicits a misperception of the model having failed
However, while their might have been failures in a few power and metro rail projects, PPP models have
seen widespread success in roads, ports and airports
Where we seem to have erred is in acknowledging the complexity of PPP models and accordingly
preparing the concession structures
Identify and address controllable factors: ‘Plug and play readiness’ of projects is imperative, and issues
such as land acquisition, permits and clearances would need to be resolved ahead of the bidding process
Minimize speculation on uncontrollable factors: Comparative evaluation, and negotiations on technical
proposals, will require bidders to undertake adequate diligence in submitting a proposal.
Renegotiation for unpredictable factors: Detailed scrutiny during evaluation will provide a baseline to
compare the impact of unpredictable outcomes, fostering a relatively transparent framework for
renegotiation.
In some sectors, if Direct Benefits Transfer separates subsidy delivery from service delivery, it will
become easier to design user-charge based projects

6. Social Equity Model
6
Enhancing project execution capabilities would be critical for rapid capacity creation and
improved returns on investments
SPV/Company
Promoter (Entrepreneur/s or
Company)
NGO(s)
Local Community
Government
Knowledge Advisory
Financiers / Investors

7. SOCIAL EQUITY MODEL
7
Investment SPV
Knowledge
delivery
Technology
Delivery
Marketing
Strategy
Partner
Credit
Insurance
Research
Institution
Financial
Institutions
Knowledge
Bank
Tie-ups with Construction,
Maintenance, Operations Companies
Consumer
Retailer, Exports
Institutional Models for
community
Innovative
Structure
PPP
Community Equity

8. SOCIAL EQUITY MODEL
8
The secret to tapping the potential that India
holds for upscaling infrastructure creation,
utilization and maintenance lies in effective
institutional partnerships wherein:
Collaborative community structures are
established on-ground to ensure social
equity with infrastructure growth
The Public Sector utilizes its delivery and
infrastructure capabilities
The Private Sector utilizes its technical and
management expertise to optimize
production, as well as lead in R&D
processes
An institutional structure to promote and
create awareness
The models should create a win-win
situation for industry, local communities,
private investors and the economy as a
whole
Proposed New Business Model:
Social Equity Model
Based on the principle of
Public Private Partnership
(PPP)
Implemented/ operated
through Collaborative
Community Structures
Financing is easier with either Government,
Corporates and Community all taking a part
in the Infrastructure Value Chain

9. SOCIAL EQUITY MODEL
9
A social equity based model, which includes the local community as a partner, is vital for making growth
more inclusive
Rural institutions like panchayats can also play a crucial role in the delivery of public services and help
empower the local communities
There is an urgent need for a co-ordinated and focused policy formulation and effective implementation of
programmes, projects, schemes, etc. for improving skills, upgrading technology, expanding markets and
capacity-building of the entrepreneurs and their groups/collectives
The advantage that PPP projects have is that they can incorporate a social focus without affecting the
economic viability and efficiency of the project
The government needs to take the lead in putting in place the appropriate framework while inviting
genuinely interested private players to put together PPP projects that would include the most important
stakeholder — the community — as partners in the whole growth process
This need appears to synergise with larger political interests and, therefore, a structured and modified PPP
process (compared to commercial viability based infrastructure model) will go a long way in creating a
win-win situation for society, government and political masses