NEW DELHI: For India to become a $5 trillion economy in the coming years, the government has set the ball rolling with its infrastructure thrust and proposal to spend about Rs 100 lakh crore in the next five years. The massive push essentially would come from building road corridors, executing port development and modernisation of projects.
In her maiden speech, Finance Minister Nirmala Sitharaman said the government planned to restructure the national highways programme to create a network of highways of a desirable capacity for better connectivity. Terming connectivity as the lifeblood of the economy, Sitharaman said the government had set an investment target of Rs 80,250 crore for Phase III of the Pradhan Mantri Gram Sadak Yojana, under which the government wants to build 1,25,000 km of village roads.
Sitharaman proposed using Public-Private Partnership to unleash faster development and completion of projects, and to make available a blueprint this year for developing a highway grid, gas grids, water grids and regional airports. The government also envisions using rivers for cargo transportation, a move that will decongest roads and railways, she added.
“The budget speech duly emphasised the importance of infrastructure and connectivity to the Indian economy in terms of enhancing and taking forward programmes across various key infrastructure sub-sectors,” said Peeyush Naidu, partner, Deloitte. “The focus on comprehensive plans and blueprints for various infrastructure plans is a welcome move—especially in the context of: considering systemic trade-offs and development of economic and efficient infrastructure, and involving the private sector in this area in a bigger way on a long-term basis,” he added.
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Projects such as industrial corridors, dedicated freight corridors, Bharatmala and Sagarmala projects, Jal Marg Vikas and UDAN will continue to improve transport infrastructure and bridge the rural-urban divide and improve. While the industrial corridors would improve infrastructure availability for greater industrial investment in the catchment regions, the dedicated freight corridors would mitigate the congestion of railway network, benefitting the common man, she said. The government also announced the formation of an expert committee to suggest ways to address the challenges of infrastructure financing.
Huge financing needed
Infrastructure financing needs have been estimated at around Rs 20 lakh crore a year. The finance minister proposed enhancing the sources of financing, including setting up a Credit Guarantee Enhancement Corporation to provide additional guarantees to lenders.