With the Narendra Modi-led government back for its second term, an infrastructure sector boost is likely to remain a top priority. Officials say the government is planning to increase spending here by 1.8 times, speed up new projects by removing bottlenecks in the approval stage and finish delayed projects.
The BJP, in its election manifesto, had promised Rs100 lakh crore ($1.4 trillion) of investments in infrastructure by 2024 and had said that it would double the length of highways by 2022 and effect a similar increase in the number of large commercial airports. India Inc is now upbeat about prospects here in view of the new government’s increased majority.
According to Harsh Goenka, chairman, RPG Enterprises, “Modi 2.0 will unleash a plethora of development-oriented investments in infrastructure, health and agriculture, which could elevate India to a position of pride among nations of the world’’.
According to the Department of Economic Affairs, which is already working on a ‘100 days’ agenda for the new government, the infrastructure sector will get a lion’s share in the upcoming budget.“This budget is likely to see a fresh focus on highways projects, and the government is considering almost doubling the budget for the Ministry of Road and Highways, with so many projects in the pipeline. There is also going to be some relief package for the ailing aviation sector and it will continue its thrust on new airports,” a senior official from Ministry of Finance told this publication.
The official added that apart from being generous with the budgetary allocation, the government is also going for many policy reforms, including further relaxing approvals for infrastructure projects, easy lending and getting stuck projects up and running.
“There are so many power projects which are stuck. There is likely to be clarity post the announcement of revised guidelines from RBI, which is expected soon. That the government is already working on big infrastructure projects which are stuck due to financing or land acquisition. Some policy work is also in the pipeline, which is expected to find space in the economic survey,” the official added.
According to a report by the Ministry of Statistics and Programme Implementation, delays in 344 infrastructure projects have resulted in total cost overruns to the tune of over `3.16 lakh crore as of the month of December 2018, while 384 projects saw time escalation. The average time overrun in these 384 delayed projects is 44.78 months.
In fact, the IL&FS crisis alone has stalled the progress of about a dozen high profile infrastructure projects worth around Rs 15,000 crore. The fate of many more such projects are still uncertain, including the prestigious Zojila pass project, multiple metro rails and several highways.
