Budget 2021

Roads, other infra projects to get a push with new Fund

V.Rishi Kumar Hyderabad | Updated on January 24, 2018

The Finance Minister has announced investment in infrastructure will go up by Rs 70,000 crore in 2015-16 while deciding to establish National Investment and Infrastructure Fund (NIIF) with an annual flow of Rs 20,000 crore aimed at bolstering the country’s ailing infrastructure sector.

This will enable the Fund to raise debt, and invest as equity in infrastructure finance companies such as the IRFC and NHB. These infrastructure companies can then leverage this extra equity, many fold.

Realising the hardship faced by infrastructure companies in securing clearances and how these often cause hurdles, the Government plans to come out with a series of plug-and-play projects in various infrastructure projects including roads, ports and railways and airports.

The Government has proposed tax free bonds for the projects in rail, road and irrigation sectors, which is seen to augment funds required for the growth of the sector.

“It is no secret that the major slippage in the last decade has been on the infrastructure front,” he said “Our infrastructure does not match our growth ambitions.”

Expressing the need to increase public investment, the FM has increased outlays on both the roads and the gross budgetary support to Railways by Rs 14,031 crore and Rs 10,050 crore respectively.

Realising the hardship the public-private participatory (PPP) mode projects of infrastructure development faced lately, the Government proposes to rebalance the approach to such projects. The FM said the major issue involved is rebalancing of risk with the sovereign (Government) has to bear a major part of the risk without absorbing it entirely.

The proposal to complete 1,00,000 km of roads under construction and the announcement of new roads for 1,00,000 km with all approvals in place will redefine the transportation infrastructure.

The Government has proposed to set up five new ultra mega power projects each with a capacity of 4000 mw which will come in with all necessary clearances even before the project is warded. This is expected to attract investment of about Rs 1,00,000 crore.

In order to streamline the regulatory environment for infra projects, the FM proposed setting up of an expert committee to examine the possibility and prepare a draft legislation where the need for multiple prior permissions can be replaced by a pre-existing regulatory mechanism. The move is seen to play role in facilitating India becoming an investment destination.

Published on March 01, 2015

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