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Hon’ble Finance Minister Mrs. Nirmala Sitharaman has presented her Maiden budget with emphasis on Infrastructure Investment to make India USD 5 Trillion Economy. India will reach USD 5 Trillion economy by 2024 with accelerated development targeted in next 5 years. The budget has laid down to invest in Building Physical and Social Infrastructure, Pollution free India with green Mother Earth and Blue Skies, Water, water management, clean Rivers.
The Government intend to invest more than 100 Lacs crore in Infrastructure Sector in next 5 years. The Government has recognized the Financing problem. It is proposed to set up High Level Committee to look into Long Term Financing of Infrastructure Sector. It is also proposed to increased bond market participation in Infrastructure Sector. The Government is also looking to increase participation by InVit and other long term modes.
The Government plans for National Grid for Electricity, Water and Gas. These will require huge investment and provide availability to entire nation.
As resource mobilization for Infrastructure Sector, It is proposed to increase Special Additional Excise duty and Road and Infrastructure Cess each byone rupee a litre on petrol and diesel. This will generate more funds for Infrastructure Investment.
The Sector wise investment and reforms are detailed below:
- Railways:The Railway sector will spend 50 Lacs Crorebetween 2018 to 2030. It is estimated that Railway Infrastructure would need capital expenditure outlays of around INR 4 lacs crore per annum. To achieve this, it is proposed to use Public-Private Partnership to unleash fasterdevelopment and completion of tracks, rolling stock manufacturing anddelivery of passenger freight services.Budget allocation of Railways sector has been increased from INR 53060 cr. to INR 65837 Cr. in line with announced investment in Railways sector.
- Airport:Under UDAN scheme, more than 100 airports are operating in India. The number of aircrafts have also increased. To attain self-reliance, India to enter into Aircraft Financing and leasing market. Proper policy initiatives to be taken to bring Maintenance, Repair and Overhaul (MRO) activities to India resulting in savings in Forex Exchange. The budgetary support for Central Sector Schemes/ projects has been reduced from INR 9900 Cr (RE) to INR 4500 Cr. It seems reduction has been done to increase private Sector participation under PPP mode.
- Roads:Bharatmala II will be launched to develop state highways. The Government has increased its focus on Rural Roads with 97% villages are connected. It is proposed to create and upgrade Rural road with PMGSY-IIIto upgrade 1,25,000kms of road length over the next five years, with anestimated cost of 80,250 crore.NHAI will raise funds through various innovative modes like TOT, Bonds and InVIT. The Budgetary support has been increased from INR 68563 Cr. to INR 72058 cr. It has also pushed NHAI to raise more funds from other routes.
- Electric Vehicles: Fame II has been rolled out with outlay of INR 10000 crore. Income Tax deduction is allowed on interest paid for purchase of Electric Vehicle upto INR 1,50,000 per annum.
Power: It is proposed to create National Grid for Electricity. It is also proposed to set up High level Empowered committee to look into retirement of old and inefficient power plants and address low capacity utilization of Gas based power plants. 35 Crore LED bulbs distribution has led to savings of INR 18341 Crore per annum. This will be expanded to Solar Stoves and Battery Charger in country. The MNRE ministry allocation has been increased from 5043 Cr to 5131 cr.
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