Spend on infra projects, states to be nudged

Shubhadeep Choudhury
Tribune News Service
New Delhi, February 1

Union Finance Minister Nirmala Sitharaman on Monday announced an allocation of Rs 5.54 lakh crore – an increase of 34.5 per cent over the previous year – as capital expenditure for infrastructure projects for 2021-22.

Sitharaman said Rs 44,000 crore of the Rs 5.54 lakh crore would be kept aside for projects or departments that show good progress on capital expenditure and were in need of further funds.

Sitharaman said Rs 2 lakh crore in addition would be provided to states and autonomous bodies for capital expenditure. The Finance Ministry would also work out specific mechanisms to nudge states to spend more of their funds on infrastructure.

Sitharaman said the huge outlay on capital expenditure would help in realising the goal of the National Infrastructure Pipeline (NIP), announced in 2019.

She said the NIP was a specific target which the government was committed to achieve. Launched with 6,835 projects, the project pipeline has now expanded to 7,400. Around 217 projects under NIP worth Rs 1.10 lakh crore under some key infrastructure ministries have already been completed.

Two more initiatives announced by Sitharaman to achieve the target set by NIP were setting up institutional structures for debt financing and by monetising assets.

Regarding the creation of institutional structure for debt financing, Sitharaman proposed setting up a professionally managed development financial institution “to act as a provider, enabler and catalyst for infrastructure financing”.

The institution would start with an initial corpus of nearly Rs 20,000 crore.