Union Budget 2020: NHAI to borrow less next year while targets elude

The government’s allocation for infrastructure is not in line with the road map laid down by the National Infrastructure Pipeline (NIP), which projected about Rs 4.9 trillion and Rs 6.7 trillion for FY20 and FY21, respectively.  In her second Budget, Union Finance Minister Nirmala Sitharaman proposed an allocation of Rs 1.7 trillion for transport infrastructure for FY21.
 
In the highways sector, the debt of the National Highways Authority of India has weighed down on the projections for next year. The borrowing limit for the body has been reduced by about 13.3 per cent to Rs 65,000 crore. This is the first reduction in the last few years.
 
The outlay for the NHAI remains flat even as the budgetary support by the government has seen a rise of about 16 per cent.

The outlay for the NHAI for 2020-21 is down about 4 per cent to Rs 1.075 trillion from about Rs 1.12 trillion in 2019-20. The budgetary support for the authority in the current fiscal is Rs 36,3691 crore, which has been raised to Rs 42,500 crore in FY21.
 
The overall plan outlay for roads and bridges is Rs 1.42245 trillion for which the government support is Rs 77,245 crore. “The National Infrastructure Pipeline (NIP) for 2019-2025 pegged the projected capital expenditure for Transportation (covering Roads, Railways, Ports and Airports) at about Rs 35.7 trillion, of which about Rs 4.9 trillion and Rs 6.7 trillion were projected for FY20 and FY21. Under this Budget, the FM proposed an allocation of Rs 1.7 trillion for transport infrastructure for FY20-21. This is marginally higher than the Rs 1.6 trillion under the previous year’s Budget,” Peeyush Naidu, Partner, Deloitte India said.
 
The decrease in the NHAI borrowing target seems to be because of worries expressed on its debt burden. This will, however, mean that the government reliance on private investment will increase.
 
Railways and roads account for nearly 30 per cent of total capital outlay while defence accounts for 30 per cent of budgetary support for capital outlay.
 
The NIP worth Rs 1.03 trillion consists of more than 6,500 projects, which range across sectors and are classified in accordance with their size and stage of development.
 
These new projects include housing, safe drinking water, access to clean and affordable energy, health care for all, world-class educational institutes, modern railway stations, airports, bus terminals, metro and railway transportation, logistics and warehousing, irrigation projects, etc.