Major infrastructure push with Rs 70,000-cr more investment

Girja Shankar Kaura

Looking to give a major boost to economic growth through a push in the infrastructure sector, Finance Minister Arun Jaitley has proposed a sizeable Rs 70,000-crore increase in investment in the sector and a slew of steps that would spur its growth.

Asserting that India's infrastructure is a mismatch with its growth ambitions, Jaitley said, “It is no secret that the major slippage in the last decade has been on the infrastructure front. Our infrastructure does not match our growth ambitions. There is a pressing need to increase public investment.” Presenting his maiden full-fledged Budget in Parliament, Jaitley also stressed the need to revitalise the public private partnership (PPP) mode of infrastructure development.

Jaitley listed infrastructure as one of the five major challenges he has to reckon with and said that it was a challenge for the government to increase investment in the sector. With private sector investment in infrastructure via the PPP model still weak, public investment needs to step in to catalyse investment, he said, while adding, “Investment in infrastructure will go up by Rs 70,000 crore in the year 2015-16, over the year 2014-15 from the Centre's funds and resources of CPSEs.” Jaitley said the government has increased outlays on both the roads and the gross budgetary support to the Railways, by Rs 14,031 crore, and Rs 10,050 crore, respectively.

Infra fund, bonds

The government intends to establish a National Investment and Infrastructure Fund (NIIF), and find monies to ensure an annual flow of Rs 20,000 crore to it.

This, he said, will enable raising the debt and in turn invest as equity in infrastructure finance companies such as the IRFC and NHB, and infrastructure finance companies in turn can then leverage this extra equity manifold.

He also announced tax-free infrastructure bonds for projects in rail, road and irrigation sectors. Pitching for corporatisation of state-run ports in the country, Jaitley said the government will encourage them to become companies.

Road Cess

Jaitley said that there is a proposal for conversion of the existing excise duty on petrol and diesel to the extent of Rs 4 per litre into Road Cess to fund investment in roads and other infrastructure.

Besides, an additional Rs 40,000 crore will be made available through this measure for these sectors, he said.

He said the North-East region has been accorded priority in the development process by two visits of Prime Minister and the launch of important infrastructure projects.