The public-private partnership (PPP) model in the infrastructure sector has not met the projected interest from the private companies on account of the higher risks and lending rates, NITI Aayog CEO Sindhushree Khullar said on Thursday.
"For quite sometime we have been talking about why the PPP model in infrastructure did not work as per expectations - the conclusions were loading higher risks on the private players than they could handle and obviously there was the question of lending rates, she told media persons here on the sidelines of the AGM of Bengal Chamber of Commerce and Industry.
Khullar said in the road sector, a new PPP model - the Hybrid Annuity model - has been introduced.
"Some upfront construction cost is paid first (by the private companies) which is then backloaded on the project," she said.
Due to lack of interest from the private sector to invest in building the nation's infrastructure, an additional Rs.70,000 crore allocation has been made in this year's budget, she said.
Khullar also said that apart from the stalled infra projects creating stress on the economy, banking assets also continue to remain an area of concern. The non-performance of the power sector and the gloom in the steel industry has impacted the nation's banking industry.
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The former Planning Commission secretary said ease of doing business is a primary area the government is pinning its hopes on to attract investment across sectors but clearances not executed in a "time-bound and sequential" manner has been a major challenge.
Supporting the vision of the government to develop the eastern zone economically, she said: "(West) Bengal is the gateway to Sikkim and the northeast and thus the manufacturing hub that is and around Bengal needs to be supported."
She also said the quality of workforce in the country needs to be addressed.
"On an average, a male worker is a standard four passout and a female worker is typically a married woman and mother of two. This needs to be addressed," she said.