Some Questions

Abstract

Abstract This chapter deals with four questions that repeatedly come up in discussions on augmenting infrastructure financing in India. First, is there a case for borrowings in foreign currency for infrastructure finance? The chapter recommends an appropriate approach for foreign financing of Indian infrastructure. Second, is there a need for a new development finance institution in India? The chapter highlights some issues for the newly formed Indian DFI to be able to fulfil its objectives. Third, is there a need for a new credit-rating system for infrastructure projects? The chapter considers whether a Loss Given Default (LGD) scale may be better than a Probability of Default (PD) scale for credit rating of infrastructure projects. A recommendation is presented. Fourth, should India have a 3P institution for shepherding PPPs in the country and systematically deal with questions that arise concerning private participation in infrastructure.