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The Union Budget of 2014-15 is a positive step forward. The Government has attached adequate importance to reduce the fiscal deficit while encouraging growth; with special focus on development of adequate infrastructure and focus on manufacturing.
The specific focus on developing industrial corridors and linking them with a major roads, rail and airports projects is one of the highlights of this budget. Care has also been taken to ensure there is adequate supply of power for these projects.
It is estimated that 215 critical infrastructure projects worth ₹7 lakh crore were stuck at various stages of development and availability of finance was one of the major roadblocks.
The reforms in the banking sector allowing for greater autonomy and divestment will ensure greater availability of funds for investment in critical projects. The decision to encourage long-term loans for infrastructure projects is a commendable step and this will provide a boost in the development of major projects. Another welcome move is the proposed setup of Infrastructure Investment Trusts to Securitise Infra Projects.
Public Private PartnershipsIndia has led the world in implementing Public Private Partnerships in the infrastructure space. World class airports, thousands of kilometres of Highways and Expressways have already been developed in addition to projects in Ports, Urban Infrastructure, Healthcare and Tourism.
With the Government encouraging increased private sector participation in critical infrastructure sectors including the Railways, Highways, Airports and Ports priorities have been set right. The allocation of more than ₹37,000 crore in the highways sector is a welcome move. The decision to link critical expressway projects alongside the proposed industrial corridors is a step in the right direction.
The recent decision to revamp norms for environmental clearances are a big boost to the industry.
Gas pipelineWhile the announcement to develop an additional 15,000 km of gas pipelines is a timely one, the impasse of the actual availability of gas for idle projects is yet to be resolved.
We expect the government to take firm decisions on both the availability and pricing of gas.
The writer is Founder and CMD, GVK
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