Rs 2.2 lakh crore marked for infrastructure, to fix irritants
Mumbai : Calling infrastructure investment the fifth support pillar in transforming India, Union Finance Minister Arun Jaitley on Monday announced a slew of measures to boost infrastructure development in the country. Jaitley in his speech laid emphasis on development of road, highways and rail network and announced a ‘mammoth’ allocation of Rs 2.18 lakh crore.
The Finance Minister announced an allocation of Rs 97,000 crore for the roads sector. This amount includes the Rs 19,000 crore he has allocated for rural roads under the Pradhanmantri Gram Sadak Yojna. According to the minister, India awarded the highest number of road projects by length and produced the highest number of motor vehicles in 2015.
“This is a sign of growth of the economy, but it presents a challenge also. Therefore, we have speeded up the process of road construction. I have proposed to allocate a sum of Rs 55,000 crore in the budget for roads and highways,” he said in his speech. Apart from this, National Highways Authority of India (NHAI) will raise Rs 15,000 crore through bond sales. With this push, the pace of completion of road projects in the country is expected to rise to 10,000 km in 2016-17.
Anuj Puri, Chairman & Country Head, JLL India, said, “Approximately 16-18 km of road construction per day has been achieved by the middle of the current financial year, and the Budget has adopted measures to significantly step up NHAI capabilities in this regard. Roads infrastructure has great influence on real estate development, particularly with the new land it opens up for development through highways and feeder routes.”
Apart from the road and highway projects, Jaitley has also made substantial allocations for Delhi Mumbai Industrial Corridor (DMIC), Metro projects, introduction of inland water transport and development of Ports.
In a major boost to provide a push to affordable housing in the country, Jaitely announced 100 per cent deduction for profits to an undertaking in housing project for flats up to 30 sq. metres in four metro cities and 60 sq. metres in other cities, approved during June 2016 to March 2019.
However, the next line after that announcement of the finance minister: “MAT to apply”, didn’t pique interest of Niranjan Hiranandani, Managing Director of Hiranandani Constructions.
He said, “With the MAT still being there it neutralised the benefit and it doesn’t help Mumbai.”
According to Chandrajit Banerjee, director general, Confederation of Indian Industry, higher public investment in key projects especially in infrastructure sectors such as roads, railways, power and waterways would ‘crowd in’ private investment and in turn have a cascading effect on growth. CII has also recommended speedy implementation of industrial clusters and parks such as NIMZ, DMIC & DFC projects.
The National Investment and Infrastructure Fund (NIIF) needs to be activated to provide more avenues for infrastructure financing.
