Infrastructure plays a very important role in shaping the economy of a country. The government is responsible for providing social and physical infrastructure which leads to human welfare, reduction of poverty and employment opportunities. But, the government alone cannot fund the infrastructure projects on its own. Therefore, the governments are partnering with the private sector for investing in infrastructure. The paper outlines the need for private sector participation in infrastructure and looks at the risks peculiar to infrastructure financing. The paper also studies the various models of public private participation and attempts to look at a viable model.

Infrastructure is inclusive of activities like energy-power, transport, water provision, telecommunications, sanitation and disposal of waste. These activities are important for the household and economic production. Absence of these would lead to deterioration of economic production and reduction in quality of life. Infrastructure facilities have been traditionally provided by the public sector because of its natural monopolistic and huge gestation characteristics.

It is important to note that the government is responsible for providing infrastructure for economic development and social welfare of the country. But investments in infrastructure were not always seen from the economic angle and therefore the investments were not made on the basis of `Project Returns', i.e., the viability of the project was not the top priority. And also at the same time the government did not give any major incentive for the private sector to enter the infrastructure arena. But over the past few years, the Indian government is encouraging private sector investment in infrastructure. Among the various models of promoting private investments in infrastructure, the Public Private Partnership (PPP) is one of the most viable and successful models all over the world.

Infrastructure Journal, Public Private Partnership Models, Economic Production, Private Sector Investment, Project Returns, Infrastructure Development, Infrastructure Financing, Government Policy Regime, Public Private Partnership Appraisal Committee, PPPAC, India Infrastructure Finance Company Limited, IIFCL, India Infrastructure Project Development Fund, IIPDF, Private Equity, Financial Resources.