← All questionsGS3 · 2014 · Indian Economy ·PPP Liabilities on Future Generations
QUESTION 8
GS3
12.5 marks

Explain how Public-Private Partnership arrangements in long-gestation infrastructure projects can transfer unsustainable liabilities to the future. What arrangements need to be put in place to ensure that successive generations’ capacities are not compromised?

WRITE IN
9 min
200 words

What the examiner wants

Explain how long-gestation PPPs shift unsustainable liabilities to the future and suggest safeguards.

ExplainMake clear how and why it happens: causes, process, and an example for each point.

Demand-wise check

  1. 1Mechanisms: contingent liabilities (guarantees, termination payments), annuity commitments, aggressive bidding and renegotiation, user fee escalations, NPAs in banks≈35 words
  2. 2Examples: stalled highway projects, power projects, airport tariffs≈35 words
  3. 3Safeguards: disclose contingent liabilities, independent regulator, renegotiation framework, risk sharing, viability gap funding, fiscal rules≈35 words
  4. 4New models: Hybrid Annuity Model, InvITs≈35 words

Open in about 30 words and close in about 30.

Answer plan

PPP conceptHow liabilities shiftExamplesSafeguardsConclusion

Where marks usually go

  • Explaining PPP generally without the intergenerational angle
  • Missing the Kelkar Committee

Draw this

  • Timeline: project start → future liabilities

Value addition

  • CommitteeKelkar Committee (2015) on revitalising PPP recommended an independent regulator, renegotiation framework and avoiding Swiss challenge.Kelkar Committee, 2015
  • SchemeHybrid Annuity Model (2016) for highways splits cost 40:60 between government and developer.MoRTH, 2016

Mapped topper copies

Reviewed public-source references related to this PYQ. Same-syllabus references are labelled separately.

Links open original public sources. MainsBuddy does not host these answer sheets.