An international financial institution, World Bank (WB) in its latest ‘Private Participation in Infrastructure (PPI)’ report has said PPI investment commitments in India along with other two emerging market developing economies (EMDEs) -- Brazil and Turkey, have declined sharply in 2016. The report noted that though a recovery marked in private infra investments in the first half (H1) of 2017 with increase of 24% over H1 2016, India has lagged by being not part of it.
The report said that the reasons behind the decline in private investments in India are aggressive bidding by private players in power, highways etc, and liberal lending by banks without duly assessing projects which resulted in the twin balance sheet problem of over-leveraged corporates and banks with stressed assets. As per WB report, PPI investment in EMDEs in H1 2017 increased by 24 percent, from $29.5 billion in H1 2016 to $36.7 billion, which stood still lower than historical levels.
The report further said that the lower investment relative to the five-year average is largely driven by declining private investment in infrastructure in three key markets - India , Turkey and Brazil, which together accounted for a majority of investment during 2011-2015 with a 58% share. WB added that though they still continued to be heavyweights, the momentum slowed in 2016.