Revamping India's PPP Model: From Transactions to Market Building

The Economic Survey 2025-26 indicates India's PPP framework must evolve from transaction-centered execution to system-level market building, emphasizing structural uncertainty reduction. Challenges like land acquisition and statutory clearances hinder progress. Future reforms should focus on professionalizing PPP cells and leveraging data platforms to monitor performance and outcomes.

The Economic Survey for 2025-26 underscores a significant shift needed in India's public-private partnership (PPP) model. It must transition from a transaction-centred approach to one that facilitates system-level market building, ensuring decreased structural uncertainties.

The pre-Budget document tabled in Parliament asserts that unresolved issues such as land acquisition and statutory clearances have weakened PPP outcomes. A stronger PPP regime will depend less on risk allocation on paper and more on the state's capacity to manage early-stage risks private entities cannot cope with alone.

As the PPP landscape evolves, particularly in infrastructure sectors like roads and shipping, the Survey calls for professionalizing PPP cells and utilizing data platforms to monitor lifecycle performances. Efforts should also be made to distinguish clearly between PPPs and EPC contracts to foster growth and understanding at sub-national levels.