Lion's share for infra to spur economic growth

Aiming to improve the infrastructure, Finance Minister Arun Jaitley on Saturday proposed Rs 70,000 crore increase in investment in the sector besides a number of steps to spur its growth.

“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,” he said adding that 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.

“The capex (capital expenditure) of the public sector units is expected to be Rs 3,17,889 crore, an increase of approximately Rs 80,844 crore over 2014-15,” he said.

Noting the poor growth in infrastructure sector for the past 10 year, the Finance Minister also announced a number of steps to drive growth in the sector.

While announcing the revival of the public private partnership (PPP) mode of infrastructure development, the Minister announced the setting up of National Investment and Infrastructure Fund (NIIF), and find monies to ensure an annual flow of Rs 20,000 crore to it.

Extra equity

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

He said permitting tax-free infrastructure bonds for projects in rail, road and irrigation sectors is also on the anvil.

On public private partnership, he said, “The PPP mode of infrastructure development has to be revisited, and revitalised. The major issue involved is re-balancing of risk.”
“In infrastructure projects, the sovereign will have to bear a major part of the risk without, of course, absorbing it entirely,” he added.

While taking up five ultra mega power projects with the investment of Rs 1 lakh crore, the Minister also announced sanctioning of building 1,00,000 km of road in rural areas.