The FM says that the government will open up the road sector, allowing entrepreneurs to take up more transport initiatives. But, details of the scheme are not yet clear.
Indian Finance Minister, Arun Jaitley today in its union budget FY17 has announced to increase in plan infrastructure. He said that there are 70 projects in road sector that were languishing at the beginning of the year, due to legacy factors. Aggregate length of these projects was about 8,300 km involving over 1 lakh crore investment. With exemplary and proactive interventions, nearly 85% of these projects have been put back on track in FY17.
The total outlay for roads will be estimated at INR 97,000 crore. Along with railways, the total spend in FY17 will be INR 218,000 crore. The total infrastructure outlay stands more than of INR 221,000 crore.
“Pace of completion of roads will rise to 10,000 kms in FY17. 10,000 NH kms to be awarded in FY17 and 50,000 kms state highways will be upgraded,” said Mr. Jaitley.
Major highlights
1. The government has allocated total INR 97,000 crore for roads and highways projects. In this, INR 55,000 crore will be for roads & highways projects, which will be further topped up by additional 15,000 crore to be raised by NHAI through bonds.
2. INR 218,000 crore investment in roads and railways in FY17.
3. Additional 50,000 kms of state highways will be taken up for up gradation as national highway.
4. Government will enact necessary amendments in the Motor Vehicles Act and open up the road transport sector in the passenger segment. An enabling eco-system will be provided for the states, which will have the choice of adopting the new legal framework.
5. Series of measures to modernize ports.
6. INR 800 crore for inland waterways.
7. Action plan for revival of unserved and underserved airports.
8. Will partner with state govt to develop some of airports to enhance regional connectivity.
9. To augment infrastructure spending further, government will permit mobilization of additional finances to the extent of INR 31,300 crore by NHAI, PFC, REC, IREDA, NABARD and Inland Water Authority through raising of Bonds during FY17.
The government also announced three new initiatives to reinvigorate private infrastructure sector.
(i) A Public Utility (Resolution of Disputes) Bill will be introduced during FY17 to streamline institutional arrangements for resolution of disputes in infrastructure related construction contracts, PPP and public utility contracts.
(ii) Guidelines for renegotiation of PPP Concession Agreements will be issued, keeping in view the long term nature of such contracts and potential uncertainties of the real economy, without compromising transparency.
(iii) A new credit rating system for infrastructure projects, which gives emphasis to various in-built credit enhancement structures will be developed, instead of relying upon a standard perception of risk which often result in mispriced loans.
Few other budget highlights
1. Allocated INR 19,000 crore for Rural Sadak Yojana in FY17.
2. INR 86,500 crore for irrigation projects in 5 years.
3. 89 irrigation projects to be treated fast.
4. Allocated INR 38,500 crore for MGNREGA project, the erstwhile UPA government’s flagship scheme.
5. Allocated INR 9,000 crore for Rural Development.
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