What would end up happening is that the urban infrastructure would improve rapidly, and begin to be a great hub for transportation. Manufacturing would boom, people would live in more urban environments, we now know is better for the environment than suburbs. If India were to adopt this policy, it would beat China in manufacturing, and we would see the beginning of the end of poverty as well as have clean urban environments. There are only a few countries that are beginning to awaken to this idea, and it would create a drastically different world than what we know today.
The problem that hinders this ideal is that there is much too much litigation surrounding public ownership of infrastructure, and albeit a stigma that the government is "good for something." The Government is virtually good for nothing, and needs to get out of the business of infrastructure. What really needs to happen is that the Government needs to respect individuals private property, and not acquire it for the "greater good." That way no one gets cheated out of land, and the force of the free market can work it's magic on the funding of infrastructure. Probably best of all; this requires no public spending and no taxation!
Take home message: privatize everything.
