Infrastructure got a major thrust in Budget 2013-14 with Finance Minister P Chidambaram today announcing a slew of measures to boost sector’s growth,like raising Rs 50,000 crore through tax-free bonds,setting up of major ports and a road regulator.
“While every sector can absorb new investment,it is the infrastructure sector that needs large volumes of investment,” Chidambaram said emphasising on the need to create “new and innovative instruments to mobilise funds” for meeting infra investments targets of Rs 55,00,000 crore in 12th Plan.
The private sector will share 47 per cent of the investment,he said.
“The key to restart the growth engine is to attract more investment,both from domestic investors and foreign investors…. We will improve communication of our policies to remove any apprehension or distrust in the minds of investors,” the Minister said.
Debt funds for infrastructure would be encouraged and tax-free bonds up to Rs 50,000 crore will be allowed in 2013-14,Chidambaram said in his Budget speech.
Government would seek funds from multilateral agencies like World Bank and Asian Development Bank to build roads in North East,linking it to neighbouring Myanmar.
To give a big push to the highways sector,he said a road regulatory authority has been proposed that will address issues adversely impacting the sector like financial stress,enhanced construction risk and contract management.
The bottlenecks stalling road projects have been addressed and 3,000 kilometres of road projects in Gujarat,Madhya Pradesh,Maharashtra,Rajasthan and Uttar Pradesh will be awarded in the first six months of 2013-14,he said.
“The Delhi Mumbai Industrial Corridor (DMIC) project has made rapid progress. Plans for seven new cities at industrial corridors have been finalised and work on two new smart industrial cities at Dholera,Gujarat and Shendra Bidkin,Maharashtra will start during 2013-14,” he said.
To augment port sector,Chidambaram said “two new major ports will be established in Sagar,West Bengal and in Andhra Pradesh to add 100 million tonnes (MT) of capacity.”
With this the number of major ports in the country will increase to 12.
In addition,a new outer harbour will be developed in the VOC port at Thoothukkudi,Tamil Nadu through PPP at an estimated cost of Rs 7,500 crore to add 42 MT of capacity.
These moves are aimed at catering to increased import of coal and oil and container volumes in the years to come.
Cargo traffic at ports during the six-month period ended September 2012 grew by just 1.8 per cent to 455.8 million tonnes due to decline in shipments handled at major ports.
On the waterways front,in addition to five inland waterways,he said: “I am happy to announce that the Minister of Water Resources will move a Bill in Parliament to declare the Lakhipur-Bhanga stretch of river Barak in Assam as the sixth national waterway.”
On power front,he said the government has given nod for constructing the power transmission link from Srinagar to Leh in Jammu & Kashmir at an investment of Rs 1,840 crore.
Chidambaram also said the government was pushing for a Chennai-Bangalore industrial corridor and a Mumbai-Bangalore industrial corridor.
In the oil and gas sector,he said the government would move towards a transparent revenue-sharing model,approve blocks that have been awarded under the New Exploration Licensing Policy. He also said that the Dabhol LNG terminal,with a capacity of 5 million tonnes a year would be fully operational in 2013-14.
Talking about rural infrastructure,he said NABARD operated the Rural Infrastructure Development Fund (RIDF)and has successfully utilised 18 tranches so far.
“I propose to raise the corpus of RIDF-XIX in 2013-14 to Rs 20,000 crore” and a sum of Rs 5,000 crore will be made available to it to finance construction of warehouses,godowns,silos and cold storage units designed to store agricultural produce,both in the public and the private sectors.
To monitor investment proposals and project under implementation,Cabinet Committee Investment(CCI) has been set up. “Two meetings of the CCI have been held already and decisions were taken in respect of a number of oil and gas,power,and coal projects. CCI will take up some more projects shortly,” he said.
Besides,he said to attract new investment and to quicken the implementation of projects,there would be an investment allowance for new high value investments.
“A company investing Rs 100 crore or more in plant and machinery during the period 1.4.2013 to 31.3.2015 will be entitled to deduct an investment allowance of 15 per cent of the investment” in addition to the current rates of depreciation.
There will be enormous spill-over benefits to small and medium enterprises,he said.