With the increased capital outlay proposed to be supported by higher budgetary allocations in railways, and metro projects, rating agency ICRA expects the impact of the interim Budget tabled by Finance Minister Piyush Goyal on Friday to be marginally positive for the infrastructure sector.
Terming infrastructure as the backbone of any nation's development, Goyal, while presenting the interim Budget for 2019-20 in the Lok Sabha, said India aspires to be a USD 10-trillion economy in the next eight years; and on the anvil is next generation infrastructure of roads, railways, seaports, airports, urban transport, gas and electric transmission and inland waterways.
ICRA, in a statement, said the impact of the budget was marginally positive for infrastructure.
The capital outlay for roads, railways, and metro projects has been budgeted to increase between 12 and 19 per cent in 2019-20 over the 2018-19 revised estimates (RE), it said.
The increased capital outlay is proposed to be supported by higher budgetary allocations in railways, and metro projects; while for roads it is primarily by way of higher NHAI's internal and extra-budgetary resources (IEBR), which is largely through debt raised by NHAI, it said.
This would make the funding availability dependent on NHAI's ability to increase IEBR significantly.
It said the capital outlay towards some key schemes related to infrastructure sector has also been projected to increase in 2019-20 budget estimates (BE).
"The capital outlay towards Pradhan Mantri Gram Sadak Yojna (PMGSY) is being increased by 22.6 per cent to Rs 19,000 crore, Pradhan Mantri Krishi Sinchai Yojna (PMKSY) by 15.3 per cent to Rs 9,516 crore, AMRUT and Smart Cities Mission (Urban Rejuvenation) by 10.6 per cent to Rs 13,900 crore in 2019-20 BE over 2018-19 RE," it said.
On the other hand, budgetary allocation towards National Investment and Infrastructure Fund (NIIF) remains modest at Rs 1,000 crore, it said.
NIIF, India's sovereign wealth fund, which was proposed to have a corpus of Rs 40,000 crore in FY 2015, has gradually started gaining traction.
"Given the huge capital requirement for the infrastructure sector, NIIF can play a vital role in augmenting capital available for infrastructure sector. A higher allocation would have provided more visibility to NIIF for making investments in infrastructure in the country," it said.
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