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Asserting that lack of infrastructure will not be allowed to hit growth, government today announced a slew of steps to fast-track projects mostly in public-private-partnerships, which finds renewed focus in Finance Minister Arun Jaitley's maiden Budget.
"The country is in no mood to suffer lack of infrastructure and apathetic governance. The task before me today is very challenging because we need to revive growth, particularly in manufacturing and infrastructure to raise adequate resources for our developmental needs," Jaitley said.
Tabling his maiden Budget in Parliament, he said," An institution to provide support to mainstreaming PPPs (public-private-partnerships) called 3P India will be set up with a corpus of Rs 500 crores."
He said India has emerged as the largest PPP market in the world with over 900 projects in various stages of development. PPPs have delivered some of the iconic infrastructure like airports, ports and highways which are seen as models for development globally, he added.
"But we have also seen the weaknesses of PPP framework, the rigidities in contractual arrangements, the need to develop more nuanced and sophisticated models of contracting and develop quick dispute redressal mechanism," he said.
The Finance Minister's concerns come at a time when delays in 110 central infra projects due to regulatory hurdle issues have resulted in over Rs 1.57 lakh crore cost overruns.
He said his government was committed to improving infrastructure in all sectors including roads, port, airports, railways, urban, rural and industrial infrastructure besides ensuring adequate flow of funds and financing of projects.
"As an innovation, a modified Real Estate Investment Trusts type structure for infrastructure projects is also being announced as Infrastructure Investment Trusts (InvITs), which would have a similar tax efficient pass through status, for PPP and other infrastructure projects," he said.
These structures would reduce the pressure on the banking system while also making available fresh equity, he said adding "I am confident these two instruments would attract long term finance from foreign and domestic sources including the NRIs."
Also, he announced enhancing present corpus of pooled municipal debt obligation facility with participation of several banks to finance infra projects in urban areas on shared risk basis to Rs 50,000 crore.
"Present corpus of this facility is Rs 5,000 crores. This Government has a major focus of providing good infrastructure, including public transport, solid waste disposal, sewerage treatment and drinking water in the urban areas. In keeping with the Prime Minister's vision for urban areas it is proposed to enlarge it to Rs 50,000 Crores with extension of the facility by five years to March 31, 2019," he said.
