The Kelkar Committee recommendations in 2015 aimed at revisiting and revitalizing the PPP (Public-Private Partnership) model of infrastructure development in India. Here are the key points from the committee’s suggestions:
- Shift Focus to Service Delivery:
- Recommendation: PPP contracts should shift their focus from fiscal benefits to service delivery for citizens.
- Rationale: The committee emphasized the need to prioritize service delivery over fiscal considerations in PPP projects.
- Improved Fiscal Reporting and Performance Monitoring:
- Recommendation: Enhance fiscal reporting practices and improve performance monitoring of PPPs.
- Objective: To ensure better transparency, accountability, and assessment of PPP projects.
- Avoidance of Government Responsibility:
- Recommendation: PPPs should not be used by the government as a means to evade its responsibility for service delivery to citizens.
- Clarity of Purpose: PPPs should complement government efforts rather than substitute or dilute them.
- Viability Assessment for Projects:
- Recommendation: Adopt the PPP model only after assessing its viability for a project in terms of costs and risks.
- Project Size Consideration: PPP structures should not be applied to very small projects where benefits do not justify the costs.
- Risk Allocation and Management:
- Observation: Inefficient and inequitable allocation of risk can lead to PPP failures.
- Recommendation: Develop a generic risk monitoring and evaluation framework covering all project life cycle aspects. Optimal risk allocation should be ensured.
- Policy and Governance Strengthening:
- Recommendation: Develop a national PPP policy document endorsed by parliament. Consider formulating a PPP law if feasible.
- Legal Amendment: Suggested amendments to the Prevention of Corruption Act, 1988, to distinguish genuine errors from acts of corruption.
- Institutional Capacity Building:
- Recommendation: Build the capacity of all stakeholders involved in PPPs, including regulators, authorities, consultants, and financing agencies.
- National-Level Institution: Propose setting up a national-level institution for capacity-building and encouraging private investments in PPPs.
- Establishment of Regulatory Bodies:
- Recommendation: Set up independent regulators in sectors engaging in PPPs.
- Adjudication Tribunal: Suggested the creation of an Infrastructure PPP adjudication tribunal for dispute resolution.
- Strengthening PPP Contracts:
- Recommendation: Protect the private sector against losses of bargaining power due to changes in the economic or policy environment.
- Renegotiation Clause: Suggested amending PPP contracts to allow for renegotiations to address long-term project dynamics.
These recommendations reflect the committee’s emphasis on balancing the interests of the public and private sectors, optimizing risk allocation, and ensuring the sustainability and success of PPP projects in the infrastructure sector.
FAQs
Q: What is the Kelkar Committee 2015?
The Kelkar Committee 2015 refers to a high-level committee appointed by the Indian government to examine and provide recommendations on the rationalization of subsidies. It was chaired by Dr. Vijay Kelkar, an eminent economist and former Finance Secretary of India.
Q: What was the objective of the Kelkar Committee 2015?
The primary objective of the Kelkar Committee 2015 was to suggest measures for the rationalization of subsidies in India. The aim was to streamline the subsidy regime, enhance efficiency, and ensure better targeting of subsidies to the intended beneficiaries.
Q: What were the key recommendations of the Kelkar Committee 2015?
The committee recommended a phased reduction and eventual elimination of subsidies on various items, including petroleum products, fertilizers, and food. It proposed the implementation of direct benefit transfers (DBT) to ensure that subsidies reach the intended beneficiaries more effectively.
Q: How did the government respond to the recommendations of the Kelkar Committee 2015?
The government considered the recommendations of the Kelkar Committee 2015 and implemented some of them, particularly focusing on the rollout of direct benefit transfers (DBT) for subsidies. However, not all recommendations were implemented in their entirety due to various socio-economic and political considerations.
Q: What impact did the Kelkar Committee 2015 have on India’s subsidy regime?
The Kelkar Committee 2015 played a significant role in initiating discussions and reforms aimed at rationalizing India’s subsidy regime. While not all recommendations were fully implemented, it contributed to the government’s efforts to improve the efficiency and targeting of subsidies, thereby enhancing fiscal sustainability and social welfare outcomes.
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