2.1. Whether the Project is Permissible under the Law of the Land?

The foremost step, in assessing compliance with the prevalent legal framework, is to ask the following two questions:

1. Whether the project is feasible/ permissible under the law of the land viz. the constitution?

2. Whether the process adopted for procurement is permissible under the Constitution?

The Seventh Schedule to the Indian Constitution sets out the Union list, the State list and the Concurrent List, which provides clarity on the authority of the Central and State Governments to undertake/initiate develop projects in specific sectors. The composition of the Union list, State list and the Concurrent list is given in the Annexure 9 of this module.

The key infrastructure sectors in the Union List include ports, airports, railways, national highways, inland water transport, telecommunications, oil fields and mineral resources. PaAmnrliament has enacted legislations that provide the legal framework for infrastructure projects, including private sector participation in some sectors such as national highways, airports, ports etc. These include legislations such as the Electricity Act, 2003, the amendment to the National Highways Authority of India Act, 1995, the Special Economic Zone Act, 2005, Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 etc. and the constitution of regulatory Authorities/Boards such as the Pollution Control Board, Telecom Regulatory Authority, Airports Authority of India, etc. in several sectors.

The key infrastructure subjects in the State List are public health and sanitation, State highways, city roads, water supply, irrigation, prisons and corrective facilities. Every State has the right to promulgate laws that govern subjects in the State List.

In most States, local municipal laws provide enabling provisions to undertake projects under the PPP framework. Further, many States have a policy framework on various key infrastructure sectors which favour PPP as the mode for implementing infrastructure projects.

Infrastructure Division, Ministry of Finance, Government of India through a notification dated October 7, 2013 has released a harmonised master list of infrastructure sectors. The same is set out as Annexure 9A.