Significant Increase in Capital Outlay
Capital outlay towards some key schemes related to the infrastructure like AMRUT, Jal Jeevan Mission, and PMKSY have been projected to increase significantly.
[vc_row][vc_column][vc_column_text]Capital outlay towards some key schemes related to the infrastructure like AMRUT, Jal Jeevan Mission, and PMKSY have been projected to increase significantly.
The capital outlay for roads, railways, and metro projects have been budgeted to increase marginally in 2020-21 BE over the 2019-20 RE. Though there has been some increase in the budgetary allocations towards roads and railways, the increase in overall capital outlay has remained significantly lower
when compared to the requirement highlighted in the NIP.
On the positive side, capital outlay towards some key schemes related to the infrastructure like AMRUT, Jal Jeevan Mission, and PMKSY have been projected to increase significantly in 2020-21 BE over 2019-20 RE. The capital outlay towards PMGSY is projected to increase by 41% to Rs. 11,127 crore, AMRUT and Smart Cities Mission (Urban Rejuvenation) by 40% to Rs. 13,750 crore, Jal Jeevan Mission by 15% to Rs. 11,500 crore, and Pradhan Mantri Awas Yojana (PMAY) by 15% to Rs. 27,500 crore in comparison to 2019-20 RE. Overall, the outlay towards the above mentioned schemes is 24% higher when compared to the 2019-20 RE; however, when compared to 2019-20 BE the increase is modest at 7%.[/vc_column_text][vc_column_text]Availability of long-term infrastructure financing has been a challenge given the problems faced by commercial banks - asset-liability mismatch and increasing share of stressed assets. To improve the financing availability for the infrastructure sector given the significant increase in investment required as per the recently announced National Infrastructure Pipeline (NIP), the budget has made provision of Rs. 22000 crore as equity infusion in IIFCL and subsidiary of NIIF. This is planned to be leveraged by these entities to provide about Rs. 1 lakh crore financing to infrastructure sector.
The budget has also made tax exemptions for Sovereign Wealth Fund in respect of investments made in Infrastructure before March 31, 2024. This can support long term capital inflows into the sector through routes like NIIF, InvITs and is also positive for the sector.[/vc_column_text][/vc_column][/vc_row]
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