Budget focuses to fast-track infra development

Union Budget 2014-15 while addressing some of the roadblocks faced by the infrastructure sector such as long-term funding concern, problems of PPP projects has also signaled it wants accelerated project execution by committing quantum of completion of road network as well as commitment of awards in addition to increased budgetary allocation.  

Budget Provisions  

Infrastructure Investment Trusts (InvITs), a modified REITS type structure for PPP and infrastructure projects will also have similar tax efficient pass through status. 

This brings in fresh equity by attracting long term finance from foreign and domestic sources including NRIs. this move would boost big infrastructure developers in the form of freeing up of equity which again would be instrumental for pick up moribund capex cycle.

Key beneficiaries: GMR Infra, JP Associates, IRB Infra, Sadbhav Engg

Banks are permitted to raise long term funds for lending infrastructure sector with minimum regulatory pre-emption such as CRR, SLR and priority sector lending (PSL). 

To set up 3P India, an institution mechanism to provide support to main-stream PPPs, with a corpus of Rs 500 crore.

Urban renewal - Five hundred habitations should be supported to renew their infrastructure and services by harnessing private capital and expertise through PPPs in the next 10 years. 

Propose an investment of Rs 37880 crore in National Highways Authority of India and State Roads which includes Rs 3000 crore for the North East.

During current financial year a target of national highway construction of 8500 km will be achieved.

The targeted awarding would provide order inflow opportunities for Road developers such as ITNL, IRB Infra, Sadbhav Engg and Ashoka Buildcon.

Budgetary allocation for PMGSY increased to Rs 14389 crore for 2014-15.

Sixteen new port projects are proposed to be awarded this year with a focus on port connectivity.  For the development of Tuticorin Outer Harbour Project (Phase I) a sum of Rs 11635 crore will be allocated.

Scheme for development of new airports in Tier I and Tier II will be launched for implementation through Airport Authority of India or PPPs.

To set up a National Industrial Corridor Authority, with its head-quarters in Pune, to coordinate the development of the industrial corridors, with smart cities linked to transport connectivity. 

Master planning of Amritsar Kolkata Industrial corridor will be completed expeditiously for the establishment of industrial smart cities in seven States of India.

Similarly the master planning of three new smart cities in the Chennai-Bengaluru Industrial Corridor region, viz., Ponneri in Tamil Nadu, Krishnapatnam in Andhra Pradesh and Tumkur in Karnataka will also be completed.

The perspective plan for the Bengaluru Mumbai Economic corridor (BMEC) and Vizag-Chennai corridor would be completed with the provision for 20 new industrial clusters.

Smart cities –  provide a sum of Rs 7060 crore in current fiscal to focus on the vision of developing ‘one hundred Smart Cities’, as satellite towns of larger cities and by modernizing the existing mid-sized cities.  

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