Focus on Infrastructure in India’s
Union Budget 2015
In
his budget speech, Finance Minister Arun Jaitley said "Major slippage in
the last decade has been in the infrastructure sector. Infrastructure sector
will increase by Rs 70,000 crore.” By the looks of it the Indian government
plans to have a large scale push in the infrastructure sector, which has seen
policy paralysis.
Infrastructure
is one of the main challenges faced by Narendra Modi’s government. The
Public-Private Partnership (PPP) model has to be reinforced by this government.
The Union Budget has proposed a 'plug-and-play' model for big-ticket
infrastructure projects such as power plants, airports and roads, and I fully
agree with this model.
"This
should unlock investments to the extent of Rs 1 lakh crore," Jaitley said,
adding that the government will consider plug-and-play model for other projects
such as roads, ports, rail lines and airports as well. I think the government’s
ideas on plug-and-play model is aligned with long-term industry demand and will
help the government attract foreign and domestic investments into much-needed
infrastructure projects as it will significantly cut down project
implementation time.
The
inadequacy of quality infrastructure at globally competitive prices has long
been recognized as a handicap to the development of the economy. Given the
focus of the government on Make-In-India to create mass manufacturing
for job creation, it was imperative for the Budget to address issues that
constrain the infrastructure sector and pursue reforms with rigour. Broadly,
the key measures announced in the Budget provide a renewed impetus to the
INVESTMENT cycle and infrastructure sector in the country.
A
few measures include creation of a National Investment and Infrastructure Fund
(NIIF) with annual inflows of Rs 20,000 crore which would make funds available
to firms for new projects, corporatisation of ports, revisiting the PPP
framework and the announcement of five new UMPPs.
