ALTERNATIVE SOURCES OF

FINANCE, PRIVATE AND SOCIAL

COSTS AND BENEFITS, PUBLIC
PRIVATE PARTNERSHIP
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Contents
1.0 ALTERNATIVE SOURCES OF FINANCE ........................................................................... 2
1.1 What is Alternative Finance? .............................................................................................. 2
1.2 Traditional Alternative Sources of Finance .......................................................................... 2
1.2.1 Lease Financing .................................................................................................................................... 2
1.2.2 Hire Purchase ....................................................................................................................................... 3
1.2.3 Equity Financing ................................................................................................................................... 4
1.2.4 Hedge Funds......................................................................................................................................... 5
1.2.5 Franchising ........................................................................................................................................... 6
1.2.6 Factoring .............................................................................................................................................. 6
1.2.7 Forfaiting .............................................................................................................................................. 7
1.3 Modern Alternative Sources of Finance ............................................................................... 8
1.3.1 Crowdfunding ....................................................................................................................................... 8

2.0 PRIVATE AND SOCIAL COSTS AND BENEFITS .............................................................. 11

2.1 Private Costs and Benefits ................................................................................................ 11
2.1.1 Private Costs ....................................................................................................................................... 11
2.1.2 Private Benefits .................................................................................................................................. 12
2.2 External Costs and Benefits............................................................................................... 12
2.2.1 External Costs ..................................................................................................................................... 12
2.2.2 External Benefits ................................................................................................................................ 12
2.3 Social Costs and Benefits .................................................................................................. 12
2.3.1 Social Costs ......................................................................................................................................... 12
2.3.2 Social Benefits .................................................................................................................................... 12

3.0 PUBLIC PRIVATE PARTNERSHIP ................................................................................. 13

3.1 What is a Public Private Partnership (PPP)? ....................................................................... 13
3.2 Public Private Partnership (PPP) Cell ................................................................................. 13
3.3 Overview of the PPP Process ............................................................................................ 14
3.4 Models of Public Private Partnership (PPP) ....................................................................... 15
3.4.1 Build-Operate-Transfer (BOT) ............................................................................................................ 15
3.4.2 Build-Own-Operate (BOO) ................................................................................................................. 15
3.4.3 Build-Own-Operate-Transfer (BOOT) ................................................................................................. 16
3.4.4 Build-Operate-Lease-Transfer (BOLT) ................................................................................................ 16
3.4.5 Lease-Develop-Operate (LDO) ........................................................................................................... 16
3.4.6 Design-Build-Finance-Operate (DBFO) ............................................................................................... 16
3.4.7 Management Contract ....................................................................................................................... 17
3.4.8 Service Contract ................................................................................................................................. 17
3.4.9 Engineering, Procurement, and Construction (EPC) Model ............................................................... 17
3.4.10 Hybrid Equity Model (HAM) ............................................................................................................. 17
3.4.11 Swiss Challenge Method .................................................................................................................. 18
3.5 Government Incentives for PPPs ....................................................................................... 18
3.5.1 Viability Gap Funding (VGF) ............................................................................................................... 19
3.5.2 India Infrastructure Project Development Fund (IIPDF) ..................................................................... 19
3.5.3 India Infrastructure Finance Company Limited (IIFCL) ....................................................................... 19
3.5.4 Foreign Direct Investment (FDI) ......................................................................................................... 20

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1.0 ALTERNATIVE SOURCES OF FINANCE

1.1 What is Alternative Finance?

• Alternative sources of finance are the financial channels, processes, and

instruments that have emerged outside of the traditional finance system
such as regulated banks and capital markets.
• Alternative finance is different from traditional banking or capital market finance,
since it uses technology-enabled 'disintermediation', which means utilising
third party capital by connecting fundraisers directly with funders, in turn,
reducing transactional costs and improve market efficiency.
• Alternative finance has grown into a considerable global industry in recent
years, particularly for small and medium enterprises.

1.2 Traditional Alternative Sources of Finance

1.2.1 Lease Financing

• A lease can be defined as an arrangement between the lessor (owner of the

asset) and the lessee (user of the asset), whereby the lessor purchases an
asset for the lessee and allows him to use it in exchange for periodical
payments.
• These payments are called lease rentals or minimum lease payments
(MLP).
• At the conclusion of the lease period, the asset goes back to the lessor (the
owner) in the absence of any other provision in the contract regarding
compulsory buying of the asset by the lessee (the user).

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• First Leasing Company of India (FLCL) was incorporated in 1973, and it was
the first public limited leasing company to commence operations in India.
• As per AS-19 for the purpose of the accounting, a lease is classified into two
categories:
▪ Finance Lease
▪ Operating Lease

Finance Lease Operating Lease

In finance lease, all the risks and rewards
associated to the ownership of the asset
is transferred to the lessee.
Generally, in case of finance lease, the
asset is of a specialized nature and tailor
made.
A finance lease is long-term in nature.
In case of operating lease, the risk and
rewards of an asset is to be borne by
the lessor.
The assets which are covered under the
operating lease are of general nature.
An operating lease is short-term in
nature.

1.2.2 Hire Purchase

• Hire purchase is a method of financing the goods through instalments

payment over a period of time.
• Under a hire purchase agreement, the hire purchaser or buyer is using the
goods and has an option to return the goods at any point of time without
paying any further instalments.
• The possession of the goods is delivered by the owner to the buyer on a
condition that such person pays the agreed amount in periodic payments.
• The property in the goods is to pass to such person on the payments on
the last instalments, and
• Such a person has a right to terminate the agreement at any time before
the property it passes.

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1.2.3 Equity Financing

• Equity financing refers to the sale of company shares in order to raise

capital.
• Investors who purchase the shares are also purchasing ownership rights to
the company.
• The ownership stake resulting from an equity investment allows the investor
to share in the company’s profit.

Sources of Equity Financing

1. Public Equity:
• Public equity is defined as the shares and stocks owned by individuals or
organisations in a public company.
• In public equity, shares in the company are offered to general public through
Initial Public Offer (IPO) or Follow-on Public Offer (FPO).
• Individuals and institutional investors like pension funds, mutual funds, etc. may
subscribe to the shares being offered by the company.

2. Private Equity:
• Private equity is a general term used to describe all kinds of funds that collect
money from a group of investors that are then used to acquire stakes in
companies.
• Virtually, all private equity firms are organized as limited partnerships
where private equity firms serve as general partners and large institutional
investors and high net worth individuals providing bulk of the capital serve as
limited partners.

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• Typically, such partnerships last for 10 years and partnership agreements

signed at the funds inception clearly define the expected payments to general
partners.

3. Venture Capital:
• Venture capital (VC) is a form of private equity.
• Venture capital firms provide finance to start-up companies and small
businesses that are believed to have long-term growth potential.
• Venture capital is typically allocated to small companies with exceptional
growth potential, or to companies that have grown quickly and appear poised
to continue to expand.

4. Angel Investors:
• An angel investor is a wealthy individual who provides financial backing for
small start-ups or entrepreneurs, typically in exchange for ownership
equity in the company.
• Angel investing is often the primary source of funding for many start-ups.
• Angel investors usually bring their business skills, experience, and
connections to the table, which helps the company in the long term.

1.2.4 Hedge Funds

• Hedge funds are alternative investments that use pooled funds and employ
a variety of strategies to earn returns for their investors.
• The aim of a hedge fund is to provide the highest investment returns as
quickly as possible.
• To achieve this goal, hedge fund investments are primarily in highly liquid
assets, enabling the fund to take profits quickly on one investment and then
shift funds into another investment that is more immediately promising.
• Hedge funds invest in virtually anything and everything—individual stocks,
bonds, commodity futures, currencies, derivatives, etc.
• The focus of hedge funds is on maximum short-term profits.
• Only accredited investors are able to invest in these funds due to complexity
and higher minimum subscription amount.

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1.2.5 Franchising

• The term ‘franchise’ is understood as an exclusive right conferred by the

parent organization to an individual or enterprise to use the former’s
successful business model, in stipulated areas.
• The franchisor (one party) grants or licenses some rights and authorities to the
franchisee (another party), to use their brand name, product, business model
in return of adequate consideration.
• Examples – McDonald’s, Dominos, Pizza Hut, Starbucks, etc.

1.2.6 Factoring

• Factoring is a financial option for the management of receivables.

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• It is a tool to obtain quick access to short-term financing and mitigate risks

related to payment delays and defaults by buyers.
• In the process of factoring, the seller sells its receivables to a financial
institution (“Factor”) at a discount.
• After the sale, there is an immediate transfer of ownership of the receivables to
the factor.
• In the due course of time, either the factor or the company, depending upon the
type of factoring, collects payments from the debtors.
• Factoring helps the company to improve the cash flows and cover the credit
risk of the company.
• Factoring is also known as “Accounts Receivables Financing”.

Recourse Factoring and Non-recourse Factoring

Recourse Factoring Non-recourse Factoring

Recourse factoring is an agreement
between the client and the factor in which
the client is required to buy back the
unpaid bills receivable from the factor.
The credit risk stays with the client in
case of non-payment by the debtor.
The client and the factor enter into an
agreement where the factor will bear
the obligation of absorbing those bills
receivable which remain unpaid.
Thus, the business remains unaffected
by the unpaid invoices.

1.2.7 Forfaiting

• Forfaiting is a type of financing that helps exporters receive immediate cash

by selling their receivables at a discount through a 3rd party.
• The payment amount is typically guaranteed by an intermediary such as a
bank (importer’s bank).
• Forfaiting also protects against credit risk, transfer risk, and the risks posed
by foreign exchange rate or interest rate changes.
• The receivables convert into a debt instrument—such as an unconditional
bill of exchange or a promissory note—which can then be traded on a
secondary market.

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Factoring Vs. Forfaiting

Basis for Factoring Forfaiting

Comparison
Meaning Factoring is an arrangement Forfaiting implies a transaction
that converts your receivables in which the forfaiter purchases
into ready cash and you don't claims from the exporter in
need to wait for the payment of return for cash payment.
receivables at a future date.
Maturity of Short-term Medium- to long-term
receivables
Finance up 80-90% 100%
to
Type Recourse or Non-recourse Non-recourse
Cost Cost of factoring borne by the Cost of forfaiting borne by the
seller (client) overseas buyer
Negotiable Does not deals in negotiable Involves dealing in negotiable
Instrument instrument instrument
Tradeable in No Yes
Secondary
market

1.3 Modern Alternative Sources of Finance

1.3.1 Crowdfunding

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• Crowdfunding is the use of small amounts of capital from a large number of

individuals to finance a new business venture.
• Crowdfunding makes use of the easy accessibility of vast networks of people
through social media and crowdfunding websites to bring investors and
entrepreneurs together.

Crowdfunding Models

1. Donation-based Crowdfunding:
• Donation-based crowdfunding is a way to source money for a project by asking
a large number of contributors to individually donate an amount to it.
• A person first creates a campaign and spreads awareness about the cause
using social media and other forms of marketing.
• Any person (donor) who relates to the cause is welcome to donate towards the
campaign. There is no minimum or maximum amount for donation.

2. Reward-based Crowdfunding:
• Rewards-based crowdfunding consists of individuals donating to a project
or business with the expectation of receiving a non-financial reward in
return, such as goods or services at a later stage.
• Business owners describe their project or business idea and fundraising goal
on a crowdfunding platform.
• In return for donations, businesses provide rewards. For example, a
jewellery designer might reward everyone who contributes Rs. 500 with an
original handmade bracelet.

3. Equity Crowdfunding:
• Equity crowdfunding (also known as crowd-investing or investment
crowdfunding) is a method of raising capital used by start-ups and early-
stage companies.

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• Equity crowdfunding offers the company’s securities to a number of potential

investors in exchange for financing.
• Each investor is entitled to a stake in the company proportional to their
investment.
• The main idea of equity crowdfunding is to raise the required capital by
obtaining small contributions from a large number of investors.

4. Peer-to-Peer (P2P) Lending:

• Peer-to-peer lending, also referred to as P2P lending, is an alternative financing
method which allows individuals to avail loans from other individuals
through online lending platforms.
• Through these platforms, borrowers who seek unsecured personal loans
can get in touch with investors who are willing to lend to them with the intention
of earning a higher return on their investments.
• P2P lending platforms let investors go through a list of verified borrowers
and their details before they lend to them.

RBI Guidelines for P2P Lending

• As per RBI directions, “Peer to Peer Lending Platform” means an intermediary

providing the services of loan facilitation via online medium or otherwise,
to a person who has entered into an arrangement with an NBFC-P2P to lend
on it or to avail of loan facilitation services provided by it.
• In order to be registered as NBFC-P2P, a company has to meet the following
guidelines as prescribed by the RBI:
▪ NBFC-P2P should have a minimum net worth of Rs. 2 crores (Rs. 20
million).
▪ No NBFC-P2P should commence or carry on the business of a Peer-
to-Peer Lending Platform without obtaining a Certificate of Registration
(CoR) from RBI
▪ NBFC-P2P should maintain a Leverage Ratio not exceeding 2.

▪ The aggregate exposure of a lender to all borrowers at any point of

time, across all P2P platforms, should be subject to a cap of Rs. 50 lakh.
▪ The aggregate loans taken by a borrower at any point of time, across
all P2Ps, should be subject to a cap of Rs. 10 lakh.

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▪ The exposure of a single lender to the same borrower, across all

P2Ps, should not exceed Rs. 50,000.
▪ The maturity of the loans should not exceed 36 months.

• In 2018, Faircent became the 1st P2P lending platform in India, to receive
NBFC-P2P certification from the RBI.

2.0 PRIVATE AND SOCIAL COSTS AND BENEFITS

2.1 Private Costs and Benefits

2.1.1 Private Costs

• Private costs refer to direct costs to the producer for producing the good or
service.
• The private cost is any cost that a person or firm pays in order to buy or produce
goods and services.
• This includes the cost of labour, material, machinery and anything else that
the person or firm pays for.
• The private cost does not take into account any negative effects or harm
caused as a result of the production.

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2.1.2 Private Benefits

• Private benefits are the benefits received by those directly involved in the
consumption and production of a product.

2.2 External Costs and Benefits

2.2.1 External Costs

• External costs are the negative effect on third parties, due to the
consumption and production activities of others. But the costs are not paid
directly by the producer.
• For example, pollution is an external cost of many products and activities.
• These are indirect costs which lead to inefficiencies in the market and
result in a difference between private costs and social costs, called
externalities.

2.2.2 External Benefits

• External Benefits are the positive effects on third parties, due to the
consumption and production activities of others.

2.3 Social Costs and Benefits

2.3.1 Social Costs

• Social costs are the costs of an economic activity to society.
• They include both private and external costs.
• When social costs exceed private costs, it means there are external costs
involved.

2.3.2 Social Benefits

• Social benefits are the total benefits to the society arising from an economic
activity.
• They include both private and external benefits.
• So, where social benefits are greater than private benefits, it means external
benefits exist.

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3.0 PUBLIC PRIVATE PARTNERSHIP

3.1 What is a Public Private Partnership (PPP)?

• A PPP is an arrangement between a government / statutory entity /

government owned entity and a private sector entity, for the provision of public
assets and/or public services, through investments being made and/or
management being undertaken by the private sector entity, for a specified
period of time.
• In simple words, PPP is a contractual arrangement between a public entity
and a private entity to manage a public infrastructure project.
• PPP is sometimes referred to as a joint venture in which a government service
or private business venture is funded and operated through a partnership of
government and one or more private sector companies.
• Typically, a private sector consortium forms a special company called a
special purpose vehicle (SPV) to build and maintain the asset.
• In 2015, the Government set up a Committee under the Chairmanship of Vijay
Kelkar, to study and evaluate the extant public-private partnership (PPP)
model in India.

3.2 Public Private Partnership (PPP) Cell

• The Ministry of Finance centralizes the coordination of PPPs, through its
Department of Economic Affairs' (DEA) PPP Cell.
• The PPP Cell which was set up in 2006 in the DEA, acts as the Secretariat for
Public Private Partnership Appraisal Committee (PPPAC), Empowered

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Committee (EC), and Empowered Institution (EI) for the projects proposed for
financial support through Viability Gap Fund (VGF).
• The PPP Cell is responsible for policy level matters concerning PPPs,
including Policies, Schemes, programmes, Model Concession Agreements and
Capacity Building.
• The PPP Cell is also responsible for matters and proposals relating to clearance
by PPPAC, Scheme for Financial Support to PPPs in Infrastructure (VGF
Scheme) and India Infrastructure Project Development Fund (IIPDF).

3.3 Overview of the PPP Process

Identifying, developing and implementing a project as a PPP involves a series of
steps and should be undertaken following a clear process. The PPP process can be
divided into a sequence of four phases:

Implementation
and Monitoring
Final Approval
and Procurement
PPP Decision,
Project Appraisal
Project and Clearance
Identification
and Needs
Analysis

1. Phase 1: Project Identification and Needs Analysis –

• Potential PPP projects are identified on the basis of an analysis of the need
for infrastructure services, and the options for meeting the service are
considered in terms of the need for and type of assets.

2. Phase 2: PPP Decision, Project Appraisal and Clearance –

• Potential PPPs are evaluated for their suitability for development as PPPs.
• Those that are considered suitable are studied in detail and an application is
made for In-principle Clearance to continue to procurement.

3. Phase 3: Final Approval and Procurement –

• The procurement process begins, application is made for Final Approval,
negotiations take place with the preferred bidder and the project is taken to
technical and financial close.

4. Phase 4: Implementation and Monitoring –

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• The project proceeds through its construction (when part of the project) and
operation phases.
• The public partner monitors the PPP over the life of the contract.

3.4 Models of Public Private Partnership (PPP)

• The Government of India recognizes several types of PPPs, such as Build-

Operate-Transfer (BOT), Build-Own-Operate (BOO), Build-Operate-Lease-
Transfer (BOLT), Design-Build-Operate-Transfer (DBFOT), Lease-Develop-
Operate (LDO), etc.
• These models vary on the level of investment, ownership control, risk sharing,
technical collaboration, duration, financing, etc.

3.4.1 Build-Operate-Transfer (BOT)

• BOT is the simple and conventional PPP model where the private partner
is responsible to design, build, operate (during the contracted period) and
transfer back the facility to the public sector.
• The role of the private sector partner is to bring the finance for the project
and take the responsibility to construct and maintain it.
• In return, the public sector will allow it to collect revenue from the users.
• The National Highways Development Project contracted out by National
Highways Authority of India (NHAI) under PPP mode is a major example for the
BOT model.

3.4.2 Build-Own-Operate (BOO)

• BOO is a variant of the BOT model, with the difference being that the
ownership of the newly built facility will rest with the private party here.

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• The public sector partner agrees to ‘purchase’ the goods and services
produced by the project on mutually agreed terms and conditions.

3.4.3 Build-Own-Operate-Transfer (BOOT)

• BOOT is another variant of the BOT model.
• Under this model, the private entity after building the project does not transfer
it to the government, instead, they own and operate the facility for a certain
period of duration mentioned in the contract, with the sole purpose of
recovering the investment cost involved in construction during the
operational phase.
• At the end of the contract, the project or facility at the end of the contract is
handed back to the government.
• This model is usually undertaken to build schools, hospitals, ports, etc.,
wherein the financial requirement is huge.

3.4.4 Build-Operate-Lease-Transfer (BOLT)

• Under BOLT, the government gives a concession to a private entity to build
a facility, own the facility, and lease the facility to the public sector.
• At the end of the lease period, the ownership of the facility is transferred
to the government.

3.4.5 Lease-Develop-Operate (LDO)

• Under LDO, the government or the public sector entity retains ownership
of the newly created infrastructure facility and receives payments in terms of
a lease agreement with the private promoter.
• This approach is mostly followed in the development of airport facilities.

3.4.6 Design-Build-Finance-Operate (DBFO)

• Under DBFO model, the private party assumes the entire responsibility for
the design, construction, finance, and operate the project for the period of
concession.
• The government or government-owned entity retains ownership of the
project.
• DBFO is used by public sector entities for infrastructure projects such as
bridges, roads, transportation facilities and so on.

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3.4.7 Management Contract

• Management Contract involves contracting most or all of the operations and
maintenance of a public facility or service to the private sector.
• Although the ultimate obligation of service provision remains with the public
authority, the day-to-day management control is vested with the private
sector.
• Usually, the private sector is not required to make capital investments.

3.4.8 Service Contract

• A Service Contract is less focused than the management contract.
• Under this model, the private promoter performs a particular operational or
maintenance function for a fee over a specified period of time.

3.4.9 Engineering, Procurement, and Construction (EPC) Model

• It is one of the oldest types of contracting agreement in the construction
industry.
• Here, companies (EPC Contractors) are responsible for designing,
construction, execution and delivery of the project. Once it is made, the asset
is transferred to the Government
• Under this model, the cost is completely borne by the government.
• Government invites bids for engineering knowledge from the private
players. Procurement of raw material and construction costs are met by the
government. The private sector’s participation is minimal and is limited to
the provision of engineering expertise.
• A difficulty of the model is the high financial burden for the government.

3.4.10 Hybrid Equity Model (HAM)

• This model was introduced for Road Infrastructure Projects.
• HAM is the combination of EPC and BOT-Annuity.

EPC 40%

BOT-Annuity 60%

• The Government pays 40% of the project cost in cash in 5 equal

instalments (annuity) during the construction phase.

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• The balance 60% of the project cost is initially borne by the developer
(Equity + Debt)
• The Developer usually invests not more than 20-25% of the project cost while
the remaining is raised as debt.
• On completion of the project, remaining payment (60%) will be paid to the
developer based on the value of assets created based on a semi-annual
annuity payment (Interest: Bank Rate + 3%)
• Revenue / Toll collection becomes the responsibility of the National
Highways Authority of India (NHAI).
• Operations and maintenance become the responsibility of the developer.
• Under HAM, the project cost is inflation-indexed.

3.4.11 Swiss Challenge Method

• It is the process of awarding project contracts to private players.
• Under Swiss Challenge Method, without an invitation from government, a
private player can submit a proposal to government for development of an
infrastructure project with exclusive intellectual property rights.

• With this, the Government has 2 options:

1. Government can buy the intellectual property rights from the original
proponent and call for a competitive bidding to award the project.

2. Government puts the details of the project out in the public and invites
proposals from other players with similar capabilities to submit their
proposals. A Committee is set up to evaluate and compare the
challenging proposals.
➢ If any proposal is better than the proposal of the original
proponent, the original proponent is asked to match with the
other proposal. If he fails, then it would be awarded to the best
bidder.

3.5 Government Incentives for PPPs

The Government has facilitated the PPP sector by offering several incentives such as:

• Viability Gap Funding (VGF)

• India Infrastructure Project Development Fund (IIPDF)
• India Infrastructure Finance Company Limited (IIFCL)
• Foreign Direct Investment (FDI)

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3.5.1 Viability Gap Funding (VGF)

• The Department of Economic Affairs (DEA), Ministry of Finance introduced

"the Scheme for Financial Support to PPPs in Infrastructure" (Viability Gap
Funding Scheme) in 2006.
• VGF was introduced with a view to support infrastructure projects undertaken
through PPP mode that are economically justified but commercially
unviable.
• VGF provides financial support of up to 40% of the Total Project Cost in
the form of grant to infrastructure projects undertaken through PPPs with a view
to making them commercially viable.

3.5.2 India Infrastructure Project Development Fund (IIPDF)

• The India Infrastructure Project Development Fund Scheme was introduced in

2007-08, to provide financial support for quality project development
activities to the States and the Central Ministries.
• The IIPDF was set up with a corpus Rs. 100 crore.
• The IIPDF Scheme aims to put in place a mechanism to fund potential PPP
projects’ project development expenses including cost of engaging
consultants and transaction advisor, thus increasing the quality and quantity
of successful PPPs.
• IIPDF is a grant and ordinarily funds up to 75% of the project development
expenses.

3.5.3 India Infrastructure Finance Company Limited (IIFCL)

• India Infrastructure Finance Company Limited (IIFCL) was incorporated under

the Companies Act as a wholly-owned Government of India company in
2006.
• IIFCL was established to provide long term finance to commercially viable
infrastructure projects.
• IIFCL has been registered as a NBFC-ND-IFC with the Reserve Bank of India
(RBI) since September 2013
• The sectors eligible for financial assistance from IIFCL include
transportation, energy, water, sanitation, communication, social and
commercial infrastructure.

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3.5.4 Foreign Direct Investment (FDI)

• A foreign direct investment (FDI) is an investment in the form of a controlling

ownership in a business in one country by an entity based in another country.
• FDI is considered as a major source of non-debt financial resource for the
economic development.
• FDI flows into India have grown consistently since liberalization and are an
important component of foreign capital since FDI infuses long term
sustainable capital in the economy and contributes towards technology
transfer, development of strategic sectors, greater innovation,
competition and employment creation amongst other benefits.
• PPPs can be used to attract FDI and get foreign contractors involved in
the developments of port, power and rail sectors efficiently.
• Well-structured PPP projects serve the purpose of creating new jobs and
fostering sustainable economic growth, while aiding FDI companies to
establish a foothold in the domestic economy, thus granting them the
opportunity to seek more contracts and expand.

(Note: FDI had been discussed in detail in a separate chapter.

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