With a major thrust on revival of infrastructure sector, the Union Budget set aside Rs 2.21 lakh crore, including Rs 55,000 crore for the building of roads and highways. In addition, Finance Minister Arun Jaitley allocated Rs 19,000 crore for Pradhan Mantri Gramin Sadak Yojana in 2016-17 and in all, Rs 27,000 crore after contribution from the States.
Allocating a major share to infrastructure, Jaitley said enhanced allocations coupled with reforms and steps will remove obstacles impeding the sector’s growth. He said infrastructure is one of the strongest pillars of economy and “exemplary” and “proactive” steps by the Government to remove hurdles have resulted in India awarding highest-ever road contracts in 2015 as well as highest-ever production of motor vehicles which are clearly “signs of growth”.
Total outlay for infrastructure has been put at Rs 2.21 lakh crore for 2016-17, the Finance Minister said adding total allocation for road and rail in 2016-17 is Rs 2.18 lakh crore. However, Railway sources said that the total allocation to the Railways is Rs 45,000 crore which is just Rs 5,000 crore higher than the last allocation. The Railways has to use this fund for constructions of tracks and rail infrastructure which includes the dedicated freight corridors.
The Finance Minister said as high as 85 per cent of “the 70 stuck road projects have been put back on track”. These projects entailed an investment to the tune of Rs 1 lakh crore involving 8,300 km, he said.
For highways sector, Jaitley said, an allocation of Rs 55,000 crore has been made while National Highways Authority of India (NHAI) can raise tax-free bonds of Rs 15,000 crore. “The total allocation for the road sector has been Rs 97,000 crore, including rural roads,” he said.
A sum of Rs 19,000 crore has been allocated for Pradhan Mantri Gramin Sadak Yojana in 2016-17 and in all, Rs 27,000 crore after contribution from the States. Jaitley also announced that “abolition of permit law will be our medium-term goal in public transport”. He said a new credit rating system for infrastructure will be developed.
To bolster ports sector, Rs 8,000 crore has been provided for Sagarmala project. The Minister said to boost mass transport, entrepreneurs will be permitted to play buses on various routes which will be “game changing” in public transport system. Jaitley also said Motor Vehicles Act will be amended.
With highways sector becoming a focus area for the Narendra Modi Government, the game changing initiatives include upgradation of 50,000 kms of State highways into National Highways, rolling out of 85 per cent of the stuck Rs 1 lakh crore projects and construction and award of 10,000 km roads each.
Road Transport and Highways Minister Nitin Gadkari termed it a “revolutionary” and “historic” Budget with much emphasis on infrastructure and said the Government has been able to revive the road sector which has been languishing in the “ICU” and now in months to come it will gain much momentum.
He said not only entrepreneurs will be able to ply buses but permit raj prevalent in the sector would be demolished.