India suffers from weak institutions—credible and predictable rules of the game—that are crucial to provide investors comfort that if they investment their capital over long periods of time and operate within the rules they will receive a fair return on their investment. This is normal operations in a ‘market’ economy of voluntary exchange and open competition.

Sadly, in much of the world—both developing and developed—the large sunk investments that characterize investment in infrastructure make it vulnerable to being ‘held up’ by governments. Hence, political and regulatory uncertainty is diverting trillions of dollars in long-term institutional capital from making a big difference around the world. This is not just funding much need new roads, ports, water/wastewater infrastructure, etc. but with the right regulatory structure, ensuring it is properly maintained.

A good start is for countries to replicate the proven special-purpose public-private sector units set up in UK (UK Infrastructure), Australia (Partnerships Victoria), and Canada (Partnerships Columbia). These institutions have a track record of increasing transparency, ensuring competition, and generally sheltering infrastructure procurement from politics. A good first step.