Special Purpose Vehicles (SPVs) are legal entities created for a particular purpose. They are presently used for structuring a wide range of capital market products across the globe. By financing the infrastructure firm in pieces, through on-balance sheet and through off-balance sheet, control rights to the business decisions are separated from those of financial decisions. This article discuses about SPVs in relation to securitization.

India, considering its physical size and its economic standards, targeted an ambitious growth of 8% in GDP over the 10th five-year plan period. Soon after the Indian economy embarked on the channel to liberalization in early 1990s, the policy executors and administrators realized the wide demand supply gap that existed for the infrastructure facilities. There are many hurdles in the development of integrated infrastructure base and it suffers from several bottlenecks, which cannot be addressed overnight. However, accomplishing ambitious growth is dubious unless the economy is adequately supported by infrastructure facilities, more so in rural parts of the country, since India is predominantly an agrarian economy. The rural infrastructure should be developed by setting up agri-trading infrastructure such as warehouses, transportation, trading hubs, public tele-information centers, and ample water supply and irrigation facilities.

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