As part of the NDA government’s renewed thrust on infrastructure, Finance Minister Arun Jaitley has focused on the roads sector, alongside railways and ports, as a key vehicle for catalysing public investments.
Jaitley Monday announced an outlay of Rs 97,000 crore for the roads sector in his Budget for the next fiscal. “I have proposed an allocation of Rs 55,000 crore in the Budget for roads and highways. This will be further topped up by an additional Rs 15,000 crore to be raised by NHAI through bonds. Thus the total investment in the roads sector, including Pradhan Mantri Gram Sadak Yojana (PMGSY) allocation, would be Rs 97,000 crore during 2016-17,” Jaitley said in his Budget speech.
Watch video: The Big Picture Of Arun Jaitley’s Budget 2016
Thrust areas include the construction and award of 10,000 km roads each over the next fiscal, upgradation of 50,000 km of state highways into national highways and rolling out of 85 per cent of the stuck projects involving investment of Rs 1 lakh crore. The government will enact necessary amendments in the Motor Vehicles Act and open up the road transport sector in the passenger segment, he said, adding that an enabling eco-system will be provided for the states which will have the choice of adopting the new legal framework.
“The major benefits of this game-changing initiative will be provision of more efficient public transport facilities, greater public convenience, new investment in this moribund sector, creation of new jobs for our youth, growth of start-up entrepreneurs and other multiplier effects,” the minister said. These measures will take us down the road to development faster, he added.
Jaitley noted that India’s highest ever kilometres of new highways were awarded in 2015. India’s highest production of motor vehicles was also achieved in 2015. “This is a sign of growth, but it presents a challenge also. Therefore, we have speeded up the process of road construction… Together with capital expenditure of railways, the total outlay on roads and railways will be Rs 2,18,000 crore in 2016-17,” Jaitley said.
He said the government expects to approve nearly 10,000 km of national highways in 2016-17, which will be much higher than in the two previous years. In addition, nearly 50,000 km of state highways will be upgraded to national highways.
In the roads sector, over 70 projects were languishing at the beginning of the year due to legacy factors. “Aggregate length of these projects was about 8,300 km, involving more than Rs 1 lakh crore investment. With exemplary and proactive interventions by Highways Minister (Nitin) Gadkari, nearly 85 per cent of these projects have been put back on track,” he said.
The Road Transport and Highways Ministry’s allocation for 2014-15 stood at Rs 33,048 crore while the Revised Estimate for 2015-16 was Rs 47,107 crore. The budgetary estimate for 2016-17 was Rs 57,976 crore.
The minister pointed to the success of ‘minor ports’ (private ports set up outside the ambit of the Port Trust Act) and said they can be an attractive investment for the private sector. “Ports in the public sector need to both attract such investment as well as leverage the huge land resources lying unused with them. To enable us to do so, ports in the public sector will be encouraged to corporatise and become companies under the Companies Act,” he added.