Infrastructure is a thrust area in India today. However, unlike other sectors, wherein market forces alone are enough for development, infrastructure sectors need much regulatory clarity and frameworks for both private and public investments. Projects in the sector typically involve many partners with the state playing a crucial role. As such appropriate contractual arrangements, credit enhancement and other forms of financial support from the state, and non-distortionary subsidies became crucial to the growth of infrastructure. With the increasing role of the private sector, the need for appropriate forms of public private partnerships and especially private finance initiatives cannot be overemphasized. Similarly, appropriate regulatory modes and market creating efforts are necessary in many sectors.
Academic institutions that focus on policy, regulatory, and market studies are important facilitators in the transformation of infrastructure sectors. Multi-disciplinary institutions like IIMA have the capacity to bring forth the learning and applications from various fields of knowledge into the infrastructure sector. In addition, such institutions can bring the cross sectoral and cross country experience to inform change and development. The design and delivery of appropriate and customized courses in frontier areas of regulation, infrastructure development, financing and project structuring are ways in which academic institutions can contribute significantly to the growth and transformation of infrastructure sectors. Academic institutions can also carry out quality non-partisan research and consultancy which can be the basis for future policy and regulatory frameworks. Examples would include the development and dissemination of new frameworks for policy and regulatory analysis, cross country experie nce sharing and the analysis of growth drivers across countries. On the other hand training and educational programs for executives, policy formulators, personnel working in regulatory bodies and various central and state governments and ministries will help bring in change and reform in the sector.
While the principles of reform and change are universal, the contextualization to a particularly complex environment such as India’s, and to the situation of late industrialisation is a challenge that only an academic institution with the best minds and commitment can take up.
With the development of technology, especially IT and vastly improved measurability, it has become feasible to unbundle sectors such as electricity into activities that are competitive (such as generation) and to limit regulation only to those where market failure is endemic. Similarly non-excludability can in some sectors such as city roads, be overcome by IT solutions. Developments in contracting and agreements and in access rules have made possible the existence of many players even in “natural monopoly” situations without imposing significantly higher costs. Regulation itself has tended to become more incentive compatible than what it used to be. All these have made possible a greater role for competition both for and within markets and to integration of the two. Developments in financial engineering, a variety of newly evolved instruments, and newer ways of working of development finance institutions in their promotion of infrastructure are challenging tasks. All of these require considerable
skills on the part of governments, developers, and financiers to put together infrastructure projects, and most importantly to be able to distinguish the value creating proposals from the merely fashionable.
The Centre for Infrastructure Policy and Regulation at IIMA has been fulfilling these roles and is in a position to enhance its activities, based on its past experience and in response to the emerging situation in the infrastructure sector.
The Centre hopes to take forward and build upon the strong foundation of knowledge in the field of infrastructure development that IIMA has contributed to. Being situated within the IIMA the CIPR draws upon the academic resources of its faculty, students, databases and networks. The objective of CIPR is to promote research, education, training and consultancy in the field of infrastructure development.