Infrastructure spending raised 8.6%

Plan outlay for coal ministry raised 15%, power ministry records 12% rise in budgetary allocation; shipping allocation cut by 2%

In the interim Budget for 2014-15, Finance Minister P Chidambaram has raised allocation towards the infrastructure sector by as much as 8.6 per cent. The government will allocate Rs 1,81,134 crore to the sector, comprising power, coal, roads, civil aviation, ports and railways, against Rs 1,66,756 crore in 2013-14.

During 2013-14, the government spent about Rs 20,000 crore less than what was allocated towards the sector.

For 2014-15, the Plan outlay for the coal ministry has been raised 15 per cent, while the power ministry recorded a 12 per cent rise in budgetary allocation.

Allocation towards the shipping and ports sectors was cut two per cent.

“In 2012-13 and in nine months of this financial year, 29,350 Mw of power capacity, 3,928 km of national highways, 39,144 km of rural roads, 3,343 km of new railway tracks and capacity of 217.5 million tonnes a year in our ports have been created to give a big boost to infrastructure,” Chidambaram said in his Budget speech.

The finance minister announced a marginal cut in spending towards civil aviation, while raising the allocation towards the roads sector five per cent, as less than 500 km of road projects were awarded in 2013-14.

Public-private partnerships (PPPs) have been given a renewed push. “We need massive investment in infrastructure and that needs to be mobilised through PPPs. Budgetary support to Indian Railways has been increased from Rs 26,000 crore to Rs 29,000 crore. The railways will have to mobilise huge resources through market borrowing and public-private partnerships,” Chidambaram said.

In 2014-15, the government will add four ultra-mega solar power projects, with a capacity of about 500 Mw each, as well as 1,684 Mw, of grid-connected solar power under the National Solar Mission.

It is estimated overall, the infrastructure sector will require investment of $1 trillion in the 12th five-year Plan.

The government plans to carry out financial restructuring of power distribution companies; it is also setting up a road regulator to address issues in the sector. Additionally, a Rail Tariff Authority is being set up.

“The government has re-emphasised the focus on infrastructure and this could be a starting point for the next government. We need more thrust for the infrastructure sector and the present government has set the agenda for the full Budget,” said Vishwas Udgirkar, senior director, Deloitte Touche Tomatsu.