Budget Offers Promising Times For Infra Sector
Amidst growing speculation on the impact of the Budget for 2017-18 and whether it would bring a spiralled growth momentum for the Indian economy, the finance minister unveiled the first integrated Union Budget of Independent India that included the proposals for the railway sector as well. Similar to as was in 2016, the key focus in Budget 2017 continues to be infrastructure growth. The finance minister gave a booster shot to the country’s infrastructure with a record budgetary allocation of Rs. 3.96 lakh crore. This demonstrates clear commitment of the government towards the sector. Given that Railway Budget is now subsumed, one has to compare the subsumed Budget of last year which stood at approximately Rs. 3.43 lakh crore, thereby resulting in an increase of approximately 15.50 per cent in the budgetary allocation towards the infrastructure sector this year. While Railways get a lion’s share of allocation, the four major focus areas of railways include passenger safety, capital and development works, cleanliness and finance and accounting reforms. Further, the government anticipates an increase in commissioning of railway lines by 3,500 kilometres in 2017-18. There is also a major impetus on modernisation and redevelopment of stations with over 25 stations already in pipeline and plan for augmentation of 7,000 stations with solar power (with 300 stations already underway). Also, the endeavour to enact Metro Rail Act is a long shot for greater private participation in the sector. On the road sector, there has been an allocation of Rs. 64,900 crore as compared to Rs. 57,976 crore in 2016-17. There is a definitive commitment for connectivity of 2,000 kilometers of coastal roads with ports and remote villages. Further, under the PMGSY, the pace of construction of roads has increased to 133 kilometres per day as against 73 kilometres in 2011-14. In addition, there is a promise to set up a multi-modal logistics park and multi modal transport facility, to make the economy more competitive. On the airports side, the finance minister has promised certain policy measures by stating that select airports in Tier II cities will be taken up for operation and maintenance in PPP mode. The funds generated thereof would be utilized for airport upgradation. Turning towards the solar sector, the government proposes to start the second phase of solar park development for additional capacity of 20,000 MW. On the Policy front, the finance minister has granted infrastructure status (and grant of corresponding incentives) to affordable housing, a long-time demand from the industry. This will allow developers access to a larger pool of bank credit and that too at a lower rate with a hope that affordable housing will really become “affordable”. Further, plans for a new restructured central scheme viz. Trade Infrastructure for Export Scheme (TIES), with a focus on India’s export infrastructure, have been laid down. Moving further, as a part of its commitment last year, the government has proposed changes to the Arbitration and Conciliation Act, 1996, to settle disputes in infrastructure related construction contracts, PPP and public utility contracts. This should lead to speedier and transparent resolution of pending litigation in Infrastructure sector. On the tax front, the Budget has proposed to extend the concessional tax rate of 5 per cent on interest on foreign currency borrowings (including rupee-denominated bonds) up to June 30, 2020. In addition, while there have been certain relaxations to the domestic transfer pricing regulations, entities which are covered under profit liked incentives continue to be governed by the said provisions. On the indirect tax front, since GST or Goods and Services Tax is at the dawn of its implementation, the government has acknowledged that there are no significant changes to be made to the existing law. Given the current state of financial affairs of infrastructure sector, there was an expectation that more financial reforms would be announced. However, there was neither any such major announcement nor any direction on operationalising the National Investment and Infrastructure Fund. Through this Budget, the finance minister has continued to demonstrate its growth trajectory and commitment towards pro infrastructure environment. While there have been promising budgetary allocations and an optimistic roadmap for the sector, one could have expected some more investor-friendly tax and regulatory proposals to set the pace and momentum towards a conducive and non-adversarial tax regime. Martin Jones Authentic Jersey
Generous outlay, but bumps remain for roads
The Centre’s infrastructure outlay, especially for the road sector, continues to improve. First, the government has budgeted ?64,900 crore to be spent in 2017-18, which is about 24 per cent higher than the revised estimate for 2016-17. Secondly, to facilitate an increase in coastal trade, it plans to add close to 2,000 km of coastal roads. The total allocation budgeted for the rural road programme, however, stands flat compared to last year, at ?19,000 crore. The Background Over the past one year, roads got built at a robust rate — from around 10 km per day at the start of the year to about 18 km per day by the end of the year. Despite this, the Centre may fall well short of the 10,000 km national highway target planned for this fiscal, with only 5,700 km bid out for construction till the end of December 2016. Unlike last year, when most of the road projects were built using pure construction contracts — in Engineering, Procurement and Construction (EPC) format — this year saw close to 30 per cent of the projects bid out using the Hybrid Annuity Model (HAM) contract. HAM is a mix where a road project is built 40 per cent through EPC format and while the other 60 per cent through the Build Operate Transfer – Annuity model. But, the worrying sign is, that increasingly EPC projects are bid at a cost that doesn’t cover the government’s estimate for the project. A similar case of aggressive bidding is also witnessed in HAM projects. The Verdict With banks reeling under increasing levels of non-performing assets from the infrastructure industry, they will be averse to lend further — especially to highly-leveraged road construction players. Moreover, only 25 per cent of the HAM projects till end of December 2016 have reached financial closure. However, with increased allocation by the government for roads, orderflow for companies will continue to be robust. The key beneficiaries include IRB Infrastructure, Ashoka Buildcon, L&T, Sadbhav Engineering, IVRCL, MEP Infrastructure and NCC. The next round of reforms for the road sector depends on how well the Investment trust (Inv-IT) model is accepted by investors, and how well the implementation of the Toll Operate and Transfer (TOT) model (that is, long-term leasing of operational projects) is carried out by the Centre. Besides, the issue of stalled projects and the effectiveness to release project funds stuck under arbitration with government bodies still needs to be watched Donald Trump Womens Jersey
Union Budget 2017: Big infrastructure push to spur growth
The Union Budget has allotted a lion’s share of Rs 3.96 lakh crore for infrastructure development, terming it as a top priority area for the government. Finance minister Arun Jaitley on Wednesday said the magnitude of investment in the space is bound to spur growth. Terming railways, roads and rivers as the “lifeline” of the country, the finance minister while presenting the Budget for 2017-18, said, “Total allocation for infrastructure stands at a record level Rs 3,96,135 crore in 2017-18.” The allocation for infrastructure in 2016-17 Budgetary estimate was Rs 3,48,952 crore which was revised to Rs 3,58,634 crore. “This magnitude of investment will spur a huge amount of economic activity across the country and create more job opportunities,” he said. He enhanced the allocation for highways sector by 12 per cent to Rs 64,900 crore for 2017-18. Highways sector, which has been one of the priority areas of the government, had a budgetary estimate of Rs 57,976 crore for this fiscal, which was revised to Rs 52,447 crore. “In the road sector, I have stepped up the Budget allocation for highways from Rs 57,976 crore in budgetary estimate 2016-17 to Rs 64,900 crore in 2017-18,” Mr Jaitley said while tabling the Budget. The Budget has a significant focus on the airports development, with the finance minister informing that a select few airports from tier-II cities will be developed through the public-private partnership mode. In addition to this, a new Metro rail policy will also be on the anvil, which will focus on innovative models of financing such projects and their implementation. The finance minister noted that infrastructure was the thrust area of the government for efficiency, productivity and quality of life and approach was to spend more on infrastructure development. Terming the Budget as a “revolutionary Budget” in the history of India, road transport, highways and shipping minister Nitin Gadkari said infrastructure space has been a major beneficiary of the budget and accordingly government is giving topmost priority in developing the sectors be it highways, waterways or multimodal hubs. He said work worth Rs 4.71 lakh crore is already on in the sector and pace would be accelerated to augment highways, waterways and shipping sectors adding that a massive Sagarmala project for port-led coastal economic development is already underway. Mr Jaitley further said the World Bank is more optimistic and has projected a GDP growth of 7 per cent in 2016-17, 7.6 per cent in 2017-18 and 7.8 per cent in 2018-19. “…This pick up in our economy is premised upon our policy and determination to continue with economic reforms, increase in public investment in infrastructure and development projects,” the finance minister said. “Railways, roads and rivers are the lifeline of our country. I feel privileged to present the first combined Budget of independent India that includes the railways also. We are now in a position to synergise the investments in railways, roads, waterways and civil aviation. For 2017-18, the total capital and development expenditure of railways has been pegged at Rs 1,31,000 crore. This includes Rs 55,000 crore provided by the government,” he added Mr Jaitley said for transportation sector as a whole, including rail, roads, shipping, a provision of Rs 2,41,387 crore has been made in 2017-18. Thomas Morstead Womens Jersey
Jaitley gives big push to multi-modal logistics
The Finance Minister has stressed on the need to have an effective multi-modal logistics and transport sector, which will make the economy more competitive. “A specific programme for development of multi-modal logistics parks, together with multi-modal transport facilities, will be drawn up and implemented,” Arun Jaitley said. “For the transportation sector as a whole, including rail, roads, shipping, the Finance Ministry has proposed ?2,41,387 crore in 2017-18. This magnitude of investment will spur a huge amount of economic activity across the country and create more job opportunities,” he added. Railways, on its part, will implement end-to-end integrated transport solutions for select commodities through partnership with logistics players, who would provide both front and back-end connectivity. Rolling stocks and practices will be customised to transport perishable goods, especially agricultural products, Jaitley added. He further said a new Metro Rail Policy will be announced with focus on innovative models of implementation and financing, as well as standardisation and indigenisation of hardware and software. This will open up new job opportunities for our youth, he said. A new Metro Rail Act will be enacted by rationalising the existing laws. This will facilitate greater private participation and investment in construction and operation of the metros. Referring to the merging of the Railway Budget with the main Budget, the Finance Minister said the move would facilitate multi-modal transport planning between railways, highways and inland waterways. “The functional autonomy of Railways will, however, continue. This will give us a holistic view of allocations for sectors and ministries. This would facilitate optimal allocation of resources,” he said. Pirojshaw Sarkari, CEO, Mahindra Logistics, said the construction of PMGSY roads will be accelerated to 133 km per day in 2016-17, against an average of 73 km during 2011-2014. This will ensure expansion of logistics activities to the under-penetrated rural areas nationwide. The restructured scheme focused on export infrastructure namely Trade Infrastructure for Export Scheme will provide further growth opportunities to the logistics sector, he added. Sam Acho Womens Jersey
FM Arun Jaitley hikes highways allocation by 12 per cent to Rs 64,900 crore in Budget 2017
Terming roads, railways and rivers as the “lifeline of our country”, Finance Minister Arun Jaitley today enhanced the allocation for highways sector by 12 per cent to Rs 64,900 crore for 2017-18. Highways sector, which has been one of the priority areas of the government, had a budgetary estimate of Rs 57,976 crore for this fiscal, which was revised to Rs 52,447 crore. “In the road sector, I have stepped up the Budget allocation for highways from Rs 57,976 crore in BE (budgetary estimate) 2016-17 to Rs 64,900 crore in 2017-18,” Jaitley said while tabling the Budget. “Railways, roads and rivers are the lifeline of our country,” he said. Road Transport and Highways Minister Nitin Gadkari said the Budget will give a big boost to infrastructure sector, specially highways. He said highways sector continues to be a focus area for the government and announcements of multi-modal logistics parks and multi-modal passenger stations will be a game changer. Presenting the Budget, Jaitley said the total length of roads, including those under PMGSY (Pradhan Mantri Gram Sadak Yojna), built from 2014-15 till the current year is about 1,40,000 kms, which is significantly higher than previous three years. Besides, 2,000 kms of coastal connectivity roads have been identified for construction and development. “This will facilitate better connectivity with ports and remote villages,” he said. The minister said the pace of construction of PMGSY roads has accelerated to reach 133 km roads per day in 2016-17, as against an average of 73 km during the period 2011-2014. “We have also taken up the task of connecting habitations with more than 100 persons in left wing extremism affected blocks,” Jaitley said, adding, “We have committed to complete the current target under PMGSY by 2019.” An allocation of Rs 19,000 crore in 2017-18 has been provided for this scheme. Together with the contribution of states, an amount of Rs 27,000 crore will be spent on PMGSY in 2017-18. Marshawn Lynch Authentic Jersey
Budget gives a big leg-up to infrastructure industry: Experts
The infra industry has hailed the added focus the sector has received in the Budget, saying the proposals will give a big boost to this key growth driver. The Budget has allocated Rs 3.96 trillion to infra sector to spur economic activities and create more jobs and has also accorded infrastructure status to affordable housing projects which will give lot of tax incentives to the players. “The Budget augments the already established mode of using budgetary spend to boost infra segment. Integrated transportation focus, including railways, metros, multi-modal transport, highways, is transformational that can take growth into the next orbit,” KPMG India’s Manish Aggarwal said. For the transport sector as a whole, including railways, road, shipping, the Government has made a provision of Rs 2.41 trillion in 2017-18. “It is also noteworthy that Railways has been given due importance with a total outlay of Rs 1.31 trillion out of which Rs 55,000 crore is committed from the Budget. “There is clear focus on rail safety with a national rail safety fund with a corpus of Rs 1 trillion for five years and passenger convenience through station redevelopment,” said Deloitte Touche Tohmatsu India’s Vishwas Udgirkar. For highways, the budget allocation has been stepped up to Rs 64,000 crore from Rs 57,676 crore, he noted. “In the aviation sector, select airports in tier-II cities have been proposed for development through PPP mode which will complement the regional connectivity plans. “The Airports Authority of India Act will be amended to enable monetisation of land assets and unlock their value. But ports and shipping, one of the focus areas of the government, is a surprise omission in the Budget,” he said. Centrum Infra Advisory’s Sandeep Upadhyay said, “Within the infra sector the focus continues to be on pushing capex in transportation sector with major impetus for the Railways. But the pace of rolling out infra projects including the need of single-window clearance and reforming PPP framework and dispute resolution with contractors are where the authorities really need to focus on.” Essar Ports’ Rajiv Agarwal said measures including those in respect of public infra spending, rural spending and tax cuts will help increase consumption and help fasten growth The FM has also accorded infra status to affordable housing segment which is likely to boost the sector. “The Budget provisions will have several spin-off benefits. Granting infra status and higher fund allocation for affordable housing (Rs 23,000 crore) is a welcome step,” IMC’s Deepak Premnarayen said. Charles Mann Authentic Jersey
Rs 2 lakh crore for development of highways in Madhya Pradesh: Nitin Gadkari
Union Minister for Road Transport Nitin Gadkari today said Rs two lakh crore have been allotted for the development of highways in Madhya Pradesh. The minister also informed that state’s 2021-km roads will be converted into national highways. “The Centre will provide Rs two lakh crore to Madhya Pradesh during a period of next two years,” Gadkari announced while laying the foundation stones for different road projects at Naugaon, a town in Bundelkhand region of Madhya Pradesh. On the demand made by chief minister Shivraj Singh Chouhan, Gadkari announced conversion of 2021-kilometers long seven different roads in the state into national highways. The minister claimed that new roads are being constructed according to international standards and these roads will “not develop potholes for next 200-years.” “The roads being constructed these days will not get damaged or develop potholes for next 200-years,” he said, adding, his ministry was also focussing on development of inland waterways. “We are not only concentrating on road construction work but also focussing on developing 20,000-km of inland waterways in the country. In Madhya Pradesh, the waterways will be developed on Chambal, Narmada rivers,” he added. At the function organised in the campus of a school in Naugaon, Gadkari laid the foundation stones for the widening of 85-km long road from Chhatipahad to Khajuraho costing at Rs 920.46-crore, widening with paved shoulder of 44.70-Km long road from Angor to Chhatarpur costing Rs 178.23-crore and widening of 90-km long road from Sanchi to Sagar worth Rs 287.34-crore. In another function at Beora town under Rajgarh district today, Gadkari also dedicated a newly constructed paved shoulder on 61-km long stretch at two lane road from Rajasthan border to Beora costing Rs 220-crore. In the same function, he also laid the foundation stone for the widening of 141.26-km long road costing Rs 1583.79-crore from Beora to Dewas. DeMarcus Ware Womens Jersey
Highways allocation stepped up to Rs 64,000 crore: Finance Minister Arun Jaitley
Finance Minister Arun Jaitley today announced enhancing the outlay for National Highways by 11 per cent to Rs 64,000 crore for 2017-18. Presenting the Budget in Parliament today, Jaitley said, “In the road sector, I have stepped up the budget allocation for the National Highways from Rs 57,676 crore in the BE of 2016-17 to Rs 64,000 crore in 2017-18.” “For transport sector, including railways, road and shipping, government provides Rs 2.41 lakh crore,” he added. Jaitley said 2,000 km of coastal connectivity roads have been identified for construction and development. This will facilitate better connectivity of ports and remote villages, he said. “The total length of roads including those under the PMGSY built from 2014-15 to current year is about 1,40,000 km, which is significantly higher than the previous three years,” Jaitley said. He said 133-km roads per day were constructed under the Pradhan Mantri Gram Sadak Yojana (PMGSY) as against 73-km in 2011-14. Darren Woodson Jersey
Record Rs 3.96 lakh cr allocation for infrastructure to spur growth
Allocating a record Rs. 3.96 lakh crore to infrastructure sector, Finance Minister Arun Jaitley today said the magnitude of investment will spur economic activities and create more jobs. Presenting Budget for 2016-17 in Parliament, Jaitley said, “Total allocation for infrastructure stands at a record level Rs. 3,96,135 crore in 2017-18.” “The magnitude of investment”, he said, will spur a huge amount of economic activities in the country and create more job opportunities. Transport As a whole, including railways, road, shipping, the Finance Minister said, “I have provided Rs. 2,41,387 crore in 2017-18.” The FM said, “I feel privileged to present the first combined budget of Independent India that includes the Railways also. We are now in a position to synergise the investment in railways, roads, waterways and civil aviation. For 2017-18, the total capital and development expenditure of Railways has been pegged at Rs. 1,31,000 crore. This includes Rs. 55,000 crore provided by the government from the Budget.” Highways For highways, he said the budget allocation has been stepped up to Rs. 64,000 crore in FY18 from Rs. 57,676 crore. He said, “In the road sector I have stepped up the budget allocation for the National Highways from Rs. 57,676 crore in the BE of 2016-17 to Rs. 64,000 crore in 2017-18.” Jaitley said 2,000 kms of coastal connectivity roads have been identified for construction and development. This will facilitate better connectivity of ports and remote villages, he said. “The total length of roads including those under the Pradhan Mantri Gram Sadak Yojana (PMGSY) built from 2014-15 to current year is about 1,40,000 kms which is significantly higher than the previous three years,” Jaitley said. He added that an effective multi-modal logistics and transport system will “make our economy more competitive. A specific programme for development of multi-modal logistic parks together with multi-modal facilities will be drawn up and implemented.” On solar power front, he said the second phase of solar power development will be taken up with an aim of generating 20,000 MW. Also, he said select airports in tier-II cities will be taken up for operations and development on PPP mode. A new metro rail policy will have innovative methods of financing, the FM said. Mike Modano Womens Jersey
Gadkari promise to shower road funds
Union minister for road transport, highways and shipping Nitin Gadkari inaugurated the three-lane New Brahmaputra Bridge at Saraighat today and dedicated it to the nation. Built at a cost of Rs 475 crore, the 1,493.58metres-long bridge is expected to ease the problem of traffic congestion at Jalukbari and Amingaon points. The foundation stone for the bridge was laid on October 22, 2006, with the target to complete it in three-and-a-half years. However, it could not be achieved because of a variety of reasons. Sources in the real estate sector said the better connectivity (through the new bridge) will certainly boost the industry on the north bank of the Brahmaputra as land use/development is directly proportionate to transportation. “Land is prime raw material for real estate. Now with the bridge to Kuruwa being proposed by the government, and if the ropeway project, which is hanging fire, materialise, the construction sector will certainly have much scope for improvement on the north bank, where land is not an issue compared to the core areas on the south bank. We can take the instance of the stretch between Jalukbari and Mirza (south Kamrup) where real estate is developing,” P.K. Sharma, the president of the Assam Real Estate Industrial Development Association, told The Telegraph. The construction was carried out by M/s Gammon India under the supervision of M/s Mott McDonald Private Ltd. The signal-free intersection at Jalukbari, flyover at Hajo junction and illumination of the bridge were added for smooth flow of traffic. The bridge was supposed to be inaugurated on January 1 but was postponed citing that the month of Puh was “inauspicious” for such an auspicious occasion. The government decided to inaugurate the bridge in February after chief minister Sarbananda Sonowal got stuck in traffic for 20 minutes while crossing the old bridge. Considering Sonowal’s request for a comprehensive development of surface, waterways and inland transport system in the state, Gadkari announced the Centre will invest more than Rs 1 lakh crore in construction of roads and Rs 2,000 crore for augmenting inland water transport. Stating that there will be no dearth of funds for the development of roads in Assam, the minister said: “You will be tired asking for funds but I will not get tired giving you funds,” Gadkari told Sonowal. He asked the state government to expedite the process of land acquisition and forest clearances for completing projects in a short time. “Altogether 1,253km of roads will be developed as national highways in Assam where the Centre will invest Rs 15,000 crore,” Gadkari said. He said the Centre had increased the Central Roads Fund from the earlier sanctioned limit of Rs 450 crore to Rs 800 crore. Gadkari said in the next two years, the National Highways and Infrastructure Development Corporation will invest Rs 8,000 crore to construct 143km roads, including important bridges and national highways. The minister said a detailed project report was being prepared for construction of 1,722km roads in the state with an investment of Rs 20,000 crore. He said his ministry will carry out dredging of the Brahmaputra from Sadia to Dhubri and effectively use the silt extracted for the development of the Brahmaputra Express Highway, which will be built as an access control highway. Gadkari also laid the foundation stone for development of the Barak river as National Waterways 16 for shipping and navigation. The work includes fairway development of Bhanga–Silchar stretch (70km) in phase I and Silchar–Lakhimpur stretch in phase II. The roll on-roll off (Ro-Ro) vessel, MV Gopinath Bordoloi, was also flagged off from Haldia port (Bengal) via the India-Bangladesh Protocol Route to serve on the Brahmaputra. Sonowal reiterated his government’s commitment to speedy and timely implementation of projects. Stephen Curry Womens Jersey