Finance Minister Arun Jaitley Saturday proposed the setting up of a National Investment and Infrastructure Fund (NIIF) with an initial corpus of Rs.20,000 crore which can be leveraged by infrastructure companies.
"I intend to establish a National Investment and Infrastructure Fund (NIIF), and find monies to ensure an annual flow of Rs.20,000 crore to it. This will enable the trust to raise debt and, in turn, invest as equity in infrastructure finance companies," Jaitley told the Lok Sabha while presenting the NDA government's first full budget.
According to the finance minister, the infrastructure finance companies can leverage extra equity from the funds and use it to erect infrastructure.
Jaitley further proposed permitting tax-free infrastructure bonds for projects in the rail, road and irrigation sectors.
The finance minister called for a revised and revitalised public-private-partnership (PPP) model for infrastructure development.
"The PPP mode of infrastructure development has to be revisited, and revitalised. The major issue involved is rebalancing of risk. In infrastructure projects, the sovereign will have to bear a major part of the risk without, of course, absorbing it entirely," Jaitley said.
Jaitley also proposed to increase outlays on roads and the gross budgetary support to the railways by Rs.14,031 crore and Rs.10,050 crore, respectively.
"It is no secret that the major slippage in the last decade has been on the infrastructure front. Our infrastructure does not match our growth ambitions. There is a pressing need to increase public investment," the minister said.
The minister also informed parliament that capital expenditure of the public sector units is expected to be Rs.317,889 crore in 2015-16, which is an increase of Rs.80,844 crore over 2014-15.
"In fact, all told, investment in infrastructure will go up by Rs.70,000 crore in the year 2015-16, over the year 2014-15 from the Centre's funds and resources of CPSEs (central public sector enterprises)," the minister said.
