The Government of India presented the Union Budget 2015-16 on February 28, 2015, which highlighted that India’s economy was currently in a bright spot in the global context. This was mainly attributed to reduce vulnerabilities concerning the economic slowdown, persistent inflation, slackening domestic demand and currency fluctuations.

The Budget estimated a GDP growth rate of 7.4 per cent in 2014-15; and banking upon macro economic stability, greater fiscal prudence, high employment generation and indigenous manufacturing, economic growth is expected to touch about 8.1-8.5 per cent in 2015-16. This would make India a leading growth driver in the global economy.

With a reformist government and a benign external environment, India’s economy is anticipated to eventually reach a double digit growth trajectory over the next few years.

As for budgetary allocations for India’s infrastructure creation, overall, the budget struck a fine balance between populist measures, procedural efficiency, employment creation and ease of doing business, which was very welcome.

There was a significant emphasis laid on infrastructure creation and the need of public investments in this area. To this end, the budget announced the formation of a National Investment and Infrastructure Fund (NIIF) at a government spend of Rs 20,000 crore, which it is believed will enable it to raise debt and invest through the equity route in companies such as the Indian Railway Finance Corporation (IRFC) and the National Housing Board (NHB).

The budget also announced tax free bonds for investing in rail, road and irrigation projects through public private partnership (PPP) models. Apart from injecting public money for the development of infrastructure projects, the government also intends to attract private participation by altering the present PPP mechanism.

The Finance Ministry has now increased budgetary outlays on both roads and railways by about Rs 14,031 crore and Rs 10,050 crore, respectively. The capex of public sector units (PSUs) is expected to stand at Rs 317,889 crore, meanwhile, which is an increase of approximately Rs 80,844 crore over the revised estimates for last fiscal. It was announced that investment in infrastructure would go up by Rs 70,000 crore during 2015-16 over the previous fiscal period'.

Anshuman Magazine, Chairman, CBRE South Asia

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