{"id":233797,"date":"2023-03-23T17:01:10","date_gmt":"2023-03-23T11:31:10","guid":{"rendered":"https:\/\/blog.forumias.com\/?page_id=233797"},"modified":"2023-03-23T17:01:10","modified_gmt":"2023-03-23T11:31:10","slug":"answered-critically-examine-the-national-champions-model-for-infrastructure-development","status":"publish","type":"page","link":"https:\/\/forumias.com\/blog\/answered-critically-examine-the-national-champions-model-for-infrastructure-development\/","title":{"rendered":"[Answered] Critically examine the \u201cnational champions\u201d model for infrastructure development."},"content":{"rendered":"<table>\n<tbody>\n<tr>\n<td width=\"616\"><strong>Introduction:<\/strong> Contextual introduction.<br \/>\n<strong>Body:\u00a0<\/strong>Explain significance of national champions\u201d model for infrastructure development. Also write some issues.<br \/>\n<strong>Conclusion<\/strong>: Write a way forward.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>According to World Bank report, India has to invest $55 billion p.a. in urban infra to meet needs of growing population. To meet the growing demand the \u201cnational champions\u201d model for infrastructure development is launched. In this model the <strong>government picks a few large conglomerates to implement its development priorities.<\/strong><\/p>\n<h2><strong>Significance of \u201cnational champions\u201d model for infrastructure development:<\/strong><\/h2>\n<ul>\n<li>Access to some cash-rich projects allows these national champions to\u00a0<strong>borrow from external credit markets<\/strong>by using these entities as collateral. This\u00a0<strong>lowers the cost of finance<\/strong>\u00a0of the other projects. It also\u00a0<strong>frees up domestic savings<\/strong>\u00a0for private investment.<\/li>\n<li>National champions can <strong>contribute to economic growth<\/strong> by generating revenue, creating jobs, and investing in research and development.<\/li>\n<li>National champions can invest heavily in research and development, leading to <strong>technological advancements<\/strong> that can benefit the broader economy.<\/li>\n<li>To\u00a0<strong>incentivise their investmen<\/strong><strong>t<\/strong>, infrastructure firms need to be given\u00a0<strong>control over existing projects<\/strong>with strong cash flows. It <strong>helps them to<\/strong>\u00a0<strong>maintain profitability.<\/strong><\/li>\n<li>The public association of the champions with the government\u2019s national development policy generates a\u00a0<strong>competitive advantage<\/strong>for the champions. It helps them in getting\u00a0<strong>domestic and foreign contracts.<\/strong>\u00a0This too guarantees some stable cash flow.<\/li>\n<li>The model can help ensure that the country has a <strong>strong presence in strategically important industries,<\/strong> such as defense or energy, which can be critical to national security.<\/li>\n<\/ul>\n<h2><strong>Issues:<\/strong><\/h2>\n<ul>\n<li>There is\u00a0<strong>direct association\u00a0<\/strong>of these conglomerates with government policies. It creates the potential for markets and regulators to treat them as<strong>too big to fail<\/strong>. This opens the door to\u00a0<strong>market hysteria, and spillovers of sectoral problems into systemic shocks<\/strong>.<\/li>\n<li>It <strong>encourages\u00a0market concentration<\/strong>. This can often be bad for\u00a0<strong>efficiency and productivity<\/strong>at the economy-wide level.<\/li>\n<li>These projects take a long time to generate large cash flows. The state needs to provide the champions with access to\u00a0<strong>additional cash flows.<\/strong>The country can turn into\u00a0<strong>industrial oligarchy.<\/strong><\/li>\n<li>It can generate the perception of an<strong>uneven playing field in terms of market access and selective regulatory forbearance<\/strong>. It can become a<strong>\u00a0significant deterrent for foreign investors.<\/strong><\/li>\n<\/ul>\n<p>Infrastructure works as a national aspiration, a barometer of national progress, a mechanism for job creation, a vehicle for crowding in private investment. The newly established <strong>Infrastructure Finance Secretariat<\/strong> is a step in the right direction.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Introduction: Contextual introduction. Body:\u00a0Explain significance of national champions\u201d model for infrastructure development. Also write some issues. Conclusion: Write a way forward. According to World Bank report, India has to invest $55 billion p.a. in urban infra to meet needs of growing population. To meet the growing demand the \u201cnational champions\u201d model for infrastructure development is&hellip; <a class=\"more-link\" href=\"https:\/\/forumias.com\/blog\/answered-critically-examine-the-national-champions-model-for-infrastructure-development\/\">Continue reading <span class=\"screen-reader-text\">[Answered] Critically examine the \u201cnational champions\u201d model for infrastructure development.<\/span><\/a><\/p>\n","protected":false},"author":10320,"featured_media":0,"parent":0,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"class_list":["post-233797","page","type-page","status-publish","hentry","entry"],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/pages\/233797","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10320"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=233797"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/pages\/233797\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=233797"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}