With eyes on linking land, water and air
Finance minister Nirmala Sitharaman on Friday proposed the creation of a “national highway grid” of desirable length and capacity in her maiden Budget speech, drawing the road map for restructuring of the national highways connectivity programme.
“The central road and infrastructure cess on petrol and diesel has been raised by Re 1 per litre. This will give a boost to the development of infrastructure,” the ministry of road transport and highways said in a statement on Friday.
The Centre has given a massive push to physical connectivity through its flagship schemes, including the Pradhan Mantri Gram Sadak Yojana (rural roads scheme), Bharatmala Pariyojana (national road corridors and highways) and Sagarmala (port connectivity). The budget provides a push to industrial corridors and dedicated freight corridors, Jal Marg Vikas Project (enhancing connectivity through inland waterways) and UDAN (regional airport development and connectivity scheme).
Sitharaman said after completing Phase 1 of the Bharatmala project, state road networks would be developed in the second phase.
“Connectivity is the lifeblood of an economy... While industrial corridors would improve infrastructure availability for greater industrial investment in the catchment regions, dedicated freight corridors would mitigate the congestion of our railway network benefitting the common man. The ambitious programme of Bharatmala would help develop national road corridors and highways, while Sagarmala would enhance port connectivity, modernisation and port-linked industrialisation,” Sitharaman said.
The finance ministry has allocated ~1,11,691.00 crore for the highway sector, which includes ~75,000 crore as internal and external budgetary resources and ~36,691 crore as budgetary support in the current financial year.
India has had reasonable success in brownfield asset monetisation, she said, adding that the National Highways Authority of India (NHAI) had raised ~24,000 crore via the toll-operate-transfer scheme.
The Centre has set an investment target of ~80,250 crore for phase three of the Pradhan Mantri Gram Sadak Yojana, under which the government wants to build 1,25,000km of village roads.
The budget has doubled the grant for a special purpose vehicle (SPV), which will take care of the debt of Air India as the government has restarted the process to sell the national carrier.
To make the offer attractive, the government is planning to reduce the debt burden and government share in the company which, according to them, were the major points for the airline not finding any bidder. The government has also proposed to give ~2,600 crore to Air India Asset Holding Limited (SPV), which is double the revised estimate.
Sitharaman said the UDAN scheme was providing air connectivity to smaller cities and enabling the common people to avail themselves of air travel. All these programmes are also helping bridge the rural-urban divide.
“We need to develop our inland waterways to shift a significant portion of inland cargo movement from road and rail. This government envisions using the rivers for cargo transportation, which will also help decongest roads and railways. The movement of cargo volume on the Ganga is estimated to increase nearly four times in the next four years. This will make movement of freight, passenger cheaper and reduce our import bill,” she said.
The shipping sector has been allocated ~5,777.79 crore, compared to ~5,079.80 crore (budget estimate) in 2018-19.
Sitharaman stressed on public-private-partnership to unleash faster development and ensure completion of railway tracks, rolling stock manufacturing and delivery of passenger freight services.
Railway infrastructure will need an investment of ~50 lakh crore between 2018 and 2030, she said, adding that public-private-partnership will be used to unleash faster development and delivery of passenger freight services.
The Budget has allocated a record ~1, 60,176 crore for the railways, which is 20% higher than the previous year when it got ~1.38 lakh crore. The railways said most of the funds will be required for track doubling, and third and fourth line works, new lines, gauge conversion and passenger amenities.
“Given that the capital expenditure outlays of railways are around ~1.5 to 1.6 lakh crore per annum, completing even all sanctioned projects would take decades,” she said.
The Centre is also focusing on the Regional Rapid Transit System (RRTS) network. New metro rail projects for a total route length of 300km were approved during 2018-19. Also, during 2019, about 210km metro lines were operationalised. With this, 657km of metro rail network has become operational, she said.
“India’s first indigenously developed payment ecosystem for transport, based on National Common Mobility Card (NCMC) standards, was launched by the PM. This will enable people to pay multiple kinds of transport charges, including metro services and toll tax, across the country. This inter-operable transport card runs on RuPay card and would allow the holders to pay for their bus travel, toll taxes, parking charges, retail shopping and even withdraw money,” she added.
The Centre has allocated ~19,152 crore for metro rail projects as compared to ~15,000 crore for FY 2018-19.
According to Amit Gupta, director, Deloitte, “Budget places holistic focus on demand for connectivity across rural and urban markets. Encouragement of RRTS, metro rail and TOD is expected to improve connectivity to congested urban agglomeration and foster development outside cluttered city centres. Key to success, however, lies in leveraging private sector development and ensuring coordination across multiple development authorities and alignment of objectives.”