Maharashtra mulls fund to speed up infrastructure projects

The govt plans to raise funds from the World Bank and the Asian Development Bank

The Maharashtra government is considering a separate infrastructure fund to complete a slew of projects.

The size of the fund will be finalised by a committee headed by the state’s additional chief secretary (finance), but officials said its corpus would be in the range of Rs 3-5 lakh crore. The committee is expected to decide on the corpus in five months.

The state government plans to raise funds from foreign banks, investors, and bodies like the World Bank, Asian Development Bank and the Japan International Cooperation Agency.

The fund will be deployed to complete Rs 25,000 crore of railway projects, Rs 80,000 crore of irrigation projects, the Rs 30,000 crore Mumbai-Nagpur expressway, Rs 50,000 crore of power transmission projects, and Rs 30,000 crore of state highways.

Railway projects in rural Maharashtra include the Ahmednagar-Beed-Parli Vaijnath line, the Wardha-Nanded (via Yavatmal-Pusad) line, the Wadsa-Gadchiroli line, gauge conversion of the Nagpur-Naghbir line, and new lines linking Pune-Nashik, Manmad-Dhule-Indore, Gadchandur-Adilabad, Kolhapur-Vaibhavwadi and Baramati-Lonand.

The state government and the Indian Railways agreed in April to set up a special purpose vehicle to take up these projects.

“Chief Minister Devendra Fadnavis mooted the infrastructure fund. The government will not mind providing a letter of comfort to funding agencies over repayment,” an official privy to the initiative said. He added the government wanted to reduce the project completion period to four years.

The official said the fund would not be used for infrastructure upgradation projects worth Rs 1 lakh crore already undertaken in Greater Mumbai. These projects, including a metro, coastal road, monorail, bridges and flyovers, are paid for by the Mumbai Metropolitan Region Development Authority and the BrihanMumbai Municipal Corporation.

The state’s public debt rose to Rs 3.33 lakh crore in 2015-16 (budget estimate) from Rs 3.02 lakh crore in 2014-15 (revised estimate). According to the Maharashtra government, the public debt at 16.9 per cent of the gross state domestic product (GSDP) was within the 21.9 per cent limit imposed by the 14th Finance Commission.