Big core sector projects remain on paper, funds not spent

INTERIM BUDGET & THE ECONOMY/INFRASTRUCTURE

Experts sounded a note of caution on the government's infrastructure development programme, saying much had not been done for the all-important sector.

Feedback Ventures Chairman Vinayak Chatterjee argued that the government's declaration that it had brought about a reduction in the fiscal deficit without any visible sign of a buoyancy in revenue or a cut in non-Plan expenditure only meant that investment earmarked for infrastructure development during the year had not been spent.

"The needle of suspicion points to a delay in the implementation of infrastructure projects during the year. If this is true, it is a very serious concern," he said.

In similar vein, an Infrastructure Leasing & Financial Services (IL&FS) functionary added that several initiatives announced in the last Budget like viability gap funding and investments for infrastructure and roads had remained largely on paper.

"The government has also not kept its promise of hiking the foreign investment limit in telecom companies to 74 per cent," he added.

On his part, pointing out that infrastructure development was key to the NDA government's economic agenda, Finance Minister Jaswant Singh proposed that the Infrastructure Fund, the Life Insurance Corporation and such other funding sources could be accessed to augment infrastructure in mega cities.

"Details will be finalised by the finance ministry to ensure that the scheme is operational by March 1, 2004," Singh said.

The Finance Minster also proposed the upgradation of the Jaipur airport into an international airport, starting an accelerated drinking water supply scheme for Bangalore, Chennai, Delhi and Hyderabad and international convention centres in Delhi, Mumbai, Goa and Rajasthan.

The Budget also proposed a fresh Centre-state initiative to accelerate the completion of the Indira Gandhi Canal project, including additional and innovative funding.

Similarly, for an extension of Narmada Canal to Rajasthan, the finance ministry will work with the Rajasthan government and assist it in financing an early completion.

"The Indira Gandhi Canal project has languished for decades, slowly inching its way, year after year, through the desert. Considering the inordinate delay in its completion and the critical importance of water in our desert areas, this canal project will, hereafter, be accelerated through a fresh Centre-state initiative, including additional innovative funding," he said in the interim Budget speech.

The interim Budget also proposes to extend the deadline for the completion of duty-free industrial units in Kutch from July 31, 2004 to December 2004.

At present, new industrial units in the Kutch Districts of Gujarat, established during the period from July 31, 2001 to July 31, 2004, and which start commercial production on or before July 31, 2004, are exempt from excise duty.

The period of exemption from excise duty will continue to be five years from the date of start of commercial production.