3.22 While some states in India have made important progress towards developing the frameworks needed for broad and robust PPP programs, others have developed policies and approaches in a single sector only, and most other states are yet to seriously commence PPP programs. As a result, there is considerable diversity in both the strength of policy and legal frameworks in place, and the level of transactions capacities and experiences.
3.23 Even taking this diversity into account, there are some common areas where frameworks in India need to be developed. As noted earlier, the policy rationale for PPPs is often limited to the use of PPPs as a source of investment capital when the public sector lacks funds. As a result, there is not much championing of PPPs on the grounds that they will lead to more efficient service delivery and better value for consumers and taxpayers. There is limited systematic compilation, analysis and transfer within the public sector of knowledge and experiences between PPP projects, sectors and
different governments; to the extent that there is a lack of confidence in civil servants to undertake PPPs, greater awareness of good examples and established procedures can help make it more acceptable to follow, with the best antidote to inaction being precedence. Capacities for evaluation and oversight in particular need to be built up: there is little evidence so far that there has been much progress in developing capacities to decide which projects are best done through PPPs, and ex-post evaluation of the performance of PPPs versus expectations has been limited so far.5 Finally, the processes for identifying and procuring PPPs are often not clearly laid out.
3.24 That there are gaps should not be surprising, in part because most state governments in India are at an early stage in the development of their PPP programs. Nonetheless it is important that the right frameworks and capacities are further developed in the states and agencies where PPP programs are going to be pursued.
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5 The exception to this are reviews of the power sector, which in turn are largely focused on the Orissa distribution privatization and Dabhol.