Investment Models are a concept and a strategic framework that defines the method by which capital is mobilized and deployed into specific assets to generate income and drive economic growth. Historically, India's investment strategy began with the Harrod-Domar Model, which guided the First Five-Year Plan (1951-1956) and emphasized economic growth through increased savings and investment. This was followed by the Feldman-Mahalanobis model (later the Nehru-Mahalanobis model) in the Second Five-Year Plan (1956-1961), which prioritized investment in heavy industries to build a strong industrial base.
A major shift occurred with the Rao-Manmohan Model of the 1991 Reforms, which introduced Liberalization, Privatization, and Globalization (LPG) to solve a severe Balance of Payments crisis, opening the economy to private and foreign capital. This model works by shifting the government's role from being the sole "doer" to a "facilitator".
Today, a key mechanism is the Public-Private Partnership (PPP) model, a long-term collaborative arrangement between public and private sectors for infrastructure development. PPPs have variants like Build-Operate-Transfer (BOT), where the private entity builds and operates the asset before transferring it to the government. A recent change is the Hybrid Annuity Model (HAM), where the government provides 40% of the total project cost as a grant, with the private partner financing the remaining 60% and receiving fixed annuity payments from the government over the operating period. This concept connects to institutions like the National Investment and Infrastructure Fund (NIIF), a government-sponsored sovereign wealth fund established in 2015 to catalyze infrastructure investment.