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>- Open up completely to MNCs and local firms, giving tax breaks to invest in
>new technology
>- No tax concessions necessary

The key factor in the decision to participate or not in an infrastructure
project is the return on investment. Whether you give tax concessions or not
(of course tax concessions reduce the complexity of the deal), the key will
be the ability to readjust tariffs in the event of unforeseen exogenous
shocks (even under a fixed-price contract), and this, in turn, depends on
the ability to to form a credible policy and regulatory board free from
enough political interests to raise tariffs when necessary (of course,
keeping in mind the interests of the consumers, too). 

With a tax concession, the corresponding tariff will be lower. W/o a tax
concession, the corresponding tariff will be higher (politically costly?)
and the govt will have another sources of taxes (which, in the case of India
today, will be relative progressive as very few of the really poor have
access to modern infrastructure). The cost will be the increased complexity
(how much more?) which should not be dismissed lightly when it comes to
foreign capital and possible technology transfer.

>- Local govt should privatize the clean-up of cities, paid by local taxes
>- Appropriate here?

Why should we depare from the User Fee concept here and allow the service
provider to be paid through local taxes? To a great degree, it is easy to
excluder users who do not pay (e.g., do not pick up the garbage in front of
their house), though public facilities may need local taxes to fund (of
course, no reason that a private firm could not build/operate such a
facility still).

>Transport - Road, rail, air, ports
>- Privatize all transportation facilities save perhaps airports, bus
>terminals, and railway stations
>- Abolish octroi and such

There is no necessity of the govt owning airports, bus terminals and railway
stations. Indeed, one option would be to allow (necessarily) long-term
concessions to take over and modernize such assets. An independent board can
regulate tariffs to prevent large monopoly prices while the private operator
has the incentive to improve efficency as they could be allowed to keep such
gains until the next tariff adjustment.

>Postal Service
>- It works, don't fix it

The first question to always ask with a govt monopoly that 'works' is, At
what cost? And if the cost is exhorbitant, then privatization may lead to
the same level of service (and most likely higher) at a much reduced cost to
the consumer (whether in stamp costs or taxes)!

- Pratap Raju

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