Budget 2016: Infrastructure gets anticipated push, focus on public investments

The government is planning to introduce the National Investment and Infrastructure Fund (NIIIF) to ensure an annual flow of Rs.20,000 crore The Dollar Business Bureau

The government is intending to develop ports both in the Eastern and Western coasts to increase their proficiency with an allocation of Rs.800 crore

Sticking closely to the expected script, the recently-concluded Union Budget 2016 indicated the government’s renewed thrust on the country’s infrastructure sector, as Finance Minister Arun Jaitely picked road, railways and ports to accelerate public investments. In his budget speech on Monday, the Finance Minister announced a total budget allocation of Rs.2.21 lakh crore for the country’s infrastructure segment. The road sector alone received a package of Rs.97,000 crore – an allocation of Rs.55,000 crore for the roads and highways sector, an additional Rs.15,000 crore to be generated by the National Highways Authority of India (NHAI) and a Rs. 27,000 crore allocation under the Pradhan Mantri Gram Sadak Yojana (PMGSY) – for roads and highways during the financial year 2016-18. Jaitely said that the NDA-led government has awarded the highest ever length of new highways in 2015, and it expects to lay about 10,000 km of national highways and upgrade about 50,000 km of state highways to national highways in the 2016-17 fiscal. “We have to speed up the process of road construction…Together with capital expenditure on railways, total outlay on roads and railways will be Rs.2,18,000 crore in 2016-17,” Jaitely said. Highlighting the success achieved by the country’s minor ports, the finance minister said the government is intending to develop ports both in the Eastern and Western coasts to increase their proficiency with an allocation of Rs.800 crore. “Ports in public sector need to both attract investment as well as leverage the huge land resources lying unused with them. To enable us to do so, ports in the public sector will be encouraged to cooperate and become companies under the Companies Act,” he said. Jaitely also announced the government’s intention to revive unserved and underserved airports with the state governments’ partnership, in order to improve domestic connectivity. “There are about 160 airports and air strips with State Governments which can be revived at an indicative cost of 50 crore to 100 crore each. Similarly, 10 of the 25 non-functional air strips with the Airport Authority of India will also be developed,” the minister said. The government is planning to introduce a National Investment and Infrastructure Fund (NIIIF) to ensure an annual flow of Rs.20,000 crore to leverage debt and invest as equity in infrastructure companies including the Indian Railway Finance Corporation (IRFC) and National Housing Bank (NHB). Jaitely reiterated that the public private partnership (PPP) model of infrastructure development needs to be revisited and revitalised and laid out three initiatives for the revival process. The steps include the Public Utilities Resolution of Disputes Bill, aimed at addressing the private construction companies’ concerns of their liquidity stuck in government projects, PPP Concession Agreements, aimed at renegotiating contracts, and a new credit-rating system for private infrastructure projects, aimed at developing in-built credit enhancement structures. The announcement has seems to have been well accepted among industry analysts, as they feel the Budget has been announced keeping in mind a multifaceted development of the sector since it reflects an apparent infrastructure push with increased allocation for the key infrastructure sectors i.e. road, rail and ports.

March 03, 2016 | 04:00pm IST

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The Dollar Business Bureau - Mar 03, 2016 10:53 IST

Budget 2016: Infrastructure gets anticipated push, focus on public investments

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