Ayussh Sanghi is teaching live on Unacademy Plus
INFRASTRUCTURE Part 2 By Ayussh Sanghi
Definition of Infrastructure Infrastructure can be defined based on six important features as identified by the National Statistical Commission(then headed by C Rangarajan) Six important features are: i. Natural Monopoly ii. High Sunk Costs . Six important features are:
iii. Price Exclusion iv. Non-rivalness in Consumption V. Non-tradability of output vi Externalities
Price Exclusion Price exclusion means that the enjoyment of benefits is contingent on payment of user charges
Non - Rivalness in Consumption Non Rivalness in Consumption Non-rivalness implies that the cost of providing a good or service to an additional individual is zero.
Non Tradability of Output Non tradable good or service is one which is produced and sold at the same location.
Externalities An externality is a consequence of an economic activity experienced by unrelated third parties; it may be either positive or negative. . Pollution emitted by a factory that spoils the surrounding environment and affects the health of citizens is an example of a negative externality The effect of a well-educated labor force on the productivity of a company is an example of a positive externalitv
Cabinet Committee on Infrastructure (CCI) CCI is a Standing Committee Constituted on 6 July, 2009 Chairperson Prime Minister . 12 member Committee CCI cxamines infrastructure proposals of more than a specific budget limit (currently CCI examines infrastructure proposals of more than a specific budget limit (currently the lower limit is 3 billion Rs.). CCI scrutinizes specific sub-areas like Railways, Ports, Energy/Power, Telecommunication etc.
Aim: 1. To expedite the decision making process related to infrastructure proposals To accelerate investment growth in the infrastructure sector and streamline the investment process to increase private sector investments. 2. CCI specifies parameters and also reviews the projects based on performance and progress.
National Infrastructure Investment Fund (NIIF) Implemented by Ministry of Finance Funding -40,000 crores Registered with SEB.I . Aim To develop the infrastructure sector by providing easy access to long term capital. This includes both greenfield and brownfield projects NBFCs that provide infrastructure financing gets quas- equity or equity assistance from NIIF