Allocating as much as of Rs 2.21 lakh crore for the infrastructure sector, Finance Minister Arun Jaitley today unveiled a slew of proposals, including abolishing permit raj and setting up a dispute redressal system, aimed at removing bottlenecks.
Infrastructure is one of the priority areas of the government, Jaitley said while presenting the Budget.
"The total outlay for infrastructure in BE 2016-17 stands at Rs 2,21,246 crore," Jaitley said.
Road Transport and Highways Minister Nitin Gadkari termed the Budget as a "landmark one, revolutionary and historic", saying it would result in an "unprecedented growth of the sector which was in ICU earlier".
With highways taking the centre-stage with enhanced allocation of Rs 97,000 crore, the game-changing initiatives include upgradation of 50,000 kms of state highways into national highways and clearance of 85 per cent of the stalled Rs 1 lakh crore projects.
"This is a totally unreformed sector which suffers from several impediments. Abolition of the permit raj will be our medium-term goal... Entrepreneurs will be able to operate buses on various routes, subject to certain efficiency and safety norms," the finance minister said.
Jaitley 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 road sector, including PMGSY (Prime Minister Gram Sadak Yojna) allocation, will be Rs 97,000 crore in 2016-17.
With the announcement to allow entrepreneurs to ply buses, Gadkari said the number of passengers is bound to more than double to 15 crore in two years, from the 7 crore now.
Jaitley added, "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 effect."
These measures will take us faster down the road to development, he said.
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.
India's highest ever kilometres of new highways were awarded in 2015. At the same time, India's highest ever production of motor vehicles was achieved in 2015.
"This is a sign of growth in the economy; but it presents a challenge also. Therefore, we have speeded up the process of road construction... Together with the capital expenditure of the railways, the total outlay on roads and railway will be Rs 2,18,000 crore in 2016-17," Jaitley said.
He said the government expects to approve nearly 10,000
kms of National Highways in 2016-17, higher than in the two previous years.
The pace of completion of road projects will rise to 10,000 kms in 2016-17. In addition, nearly 50,000 kms of state highways will be upgraded to National Highways.
The finance minister said that in the road sector, there were more than 70 projects that were languishing at the beginning of the year due to legacy issues.
"Aggregate length of these projects was about 8,300 kms involving more than Rs 1 lakh crore investment. With exemplary and proactive interventions by Highways Minister Gadkari, nearly 85 per cent of these projects have been put back on the track," he said.
The budgetary estimate for 2016-17 stood at Rs 57,976 crore. To augment infrastructure spending further, the government will permit mobilisation of additional finances to the extent of Rs 31,300 crore by NHAI, PFC, REC, etc through raising of bonds during 2016-17.
"We are implementing the Pradhan Mantri Gram Sadak Yojana (PMGSY) as never before. This scheme had suffered in the past because of underfunding. The allocations in 2012-13 and 2013-14 were only Rs 8,885 and Rs 9,805 crore respectively. We have substantially increased the allocation in the last two years and have now allocated Rs 19,000 crore in 2016-17," Jaitley said.
Together with states' share, a total of about Rs 27,000 crore will be spent on the Yojana in 2016-17, Jaitley said.
"Our goal is to advance the completion target of the programme from 2021 to 2019 and connect the remaining 65,000 eligible habitations by constructing 2.23 lakh kms of roads. Accordingly, the pace of construction which is currently 100 kms per day, as compared to the average of 73.5 kms during 2011-14, will be substantially stepped up," he said.
Jaitley also proposed an infrastructure cess of 1 per cent on small petrol, LPG, CNG cars, 2.5 per cent on diesel cars of certain capacity and 4 per cent on other higher engine capacity vehicles and SUVs to combat pollution and traffic situation.
"We are planning to develop new greenfield ports both in the eastern and western coasts of the country. The work on the National Waterways is also being expedited. Rs 800 crore has been provided for these initiatives," he added.
Under its ambitious Sagarmala project, the government is looking to mobilise at least Rs 10 lakh crore investment, including Rs 4 lakh crore in the infrastructure sector alone.
The finance minister also announced that the Customs Act is being amended to provide for deferred payment of Customs duties for a certain class of importers and exporters.
Announcing three new initiatives for infrastructure, he said a Public Utility (Resolution of Disputes) Bill will be introduced during 2016-17 to streamline institutional arrangements for resolution of disputes in infrastructure related construction contracts, PPP etc.
For speedier resolution of stressed assets, debt recovery tribunals will be strengthened with focus on improving the existing infrastructure.
He said LIC will set up a dedicated fund to provide credit enhancement to infrastructure projects.
