The hike in the central plan outlay for two key infrastructure sectors -- energy and transport -- in 2009-10 is much lower than that provided for in the previous budget, while there is a dip in the outlay in the communications sector.
This is despite the acknowledgement of an “infrastructure gap” in the country by Finance Minister Pranab Mukherjee in his speech in Parliament today. It has been left to the new government to “bridge the infrastructure gap by increasing investments in infrastructure to more than 9 per cent of the gross domestic product (GDP) by 2014, from about 5 per cent of GDP currently".
Here is what the budget numbers show for the three main infrastructure sectors:
ENERGY: The central plan outlay for energy has been increased by 16 per cent, against a rise of 30 per cent in the last Budget. The outlay has been increased to Rs 114,537 crore in 2009-10 from the revised estimate of Rs 98,877 crore for 2008-09. The revised estimate for energy is about 5 per cent more than the original Budget estimate of Rs 93,815 crore.
TRANSPORT: The outlay for transport (including provision for rural roads) has been increased by 10 per cent, against a rise of 22 per cent in the last Budget. From the revised estimate of Rs 78,269 crore, the outlay has been increased to Rs 86,218 crore for 2009-10. The revised estimate for transport is about 7 per cent lower than the original Budget estimate of Rs 84,177 crore. About 43 per cent of this outlay is for the railways and about 38 per cent has been set aside for roads and bridges.
TELECOM: In the case of communications, the Rs 16,680 crore central plan outlay for 2009-10 is 17.6 per cent lower than the revised estimate of Rs 20,237 crore for the current fiscal year. Last year, the outlay had been increased by 32 per cent.
Finance Minister Mukherjee, however, took credit for increasing infrastructure investments in the months gone by to provide a growth stimulus to the economy.
“In the period from August 2008 to January 2009 alone, the government accorded approval for 37 infrastructure projects worth Rs 70,000 crore,” he said in his speech while presenting the Interim Budget.
Giving details about investment in infrastructure through public-private partnership, Mukherjee said: “54 central sector infrastructure projects with a total project cost of Rs 67,700 crore have been given in-principle or final approval by the PPP appraisal committee and 23 projects amounting to Rs 27,900 crore have been approved for viability gap funding in 2008-09.”
He also highlighted the government’s decision to enable the India Infrastructure Finance company (IIFCL) to “refinance 60 per cent of the commercial bank loans for PPP projects in critical sectors over the next eighteen months or so”.
IIFCL has been authorized to raise Rs 10,000 crore for this purpose by March 2009, with a provision for raising another Rs 30,000 crore if required.
“With this, IIFCL and banks will be able to support projects involving a total investment of Rs 100,000 crore in infrastructure,” he added.
In the case of urban infrastructure, the outlay for the flagship programme – Jawaharlal Nehru National Urban Renewal Mission (JNNURM) – has been hiked to Rs 11,842 crore. This is over 70 per cent more than the Rs 6,866 crore allocated to the programme in the current fiscal year.
As of December 31, 2008, 386 projects amounting to Rs 39,000 crore have been sanctioned under JNNURM, Mukherjee said.
