New Delhi: India will need Rs50 trillion in investments in roads, air, rail and inland waterways, finance minister Arun Jaitley said on Thursday, terming infrastructure development as the growth driver of the economy.
Most of the money, he hinted, would be raised as equity from the market.
Infrastructure development has been one of the focus areas of the Narendra Modi government. Starting with an allocation of around Rs1.81 trillion in 2014-15, the budget share of infrastructure has reached Rs3.96 trillion in 2017-18, almost double in four years.
Jaitley said that during 2017-18, the cabinet approved the ambitious Bharatmala scheme to strengthen the roads network, for which the government would raise Rs5.35 trillion as equity from the market. He said the road ministry should continue to monetize its road assets through the toll-operate-transfer model.
The finance minister also announced the government’s new roadmap for infrastructure, which included plans to introduce seaplanes and a passenger-friendly toll policy. Jaitley said the government was working on a “pay as you travel" policy for toll plazas. Mint first reported on this policy in May last year.
The finance minister allocated a capex of Rs1.48 trillion for railways—the sector’s highest ever. The minister focused on the ongoing projects of the railways which included modernization and passenger safety. He said the government will continue to work on redevelopment of 600 railway stations that are to be equipped with modern facilities like Wi-Fi, CCTV cameras, escalators, etc.
Jaitley said railways will continue to focus on safety, maintenance of tracks and increased use of technology. The railways plans to procure 12,000 wagons, 5,160 coaches and 700 locomotives. As for air travel, the government will improve airport capacity across the country by five times to cater to a billion trips a year.
The push will also be towards the government’s regional connectivity scheme that has already connected 16 new airports and will connect 56 unserved airports and 31 helipads. The scheme, Ude Desh Ka Aam Nagrik (Udan), which loosely translates as “let the common man fly", proposes that at least half the seats on every flight should have a fare cap of Rs2,500 per seat per hour of flying.
Udan partly subsidizes such fares through a cess on flights to metro cities. It will cost the government about Rs800 crore annually, some of which is being recovered through the cess on metro flights.
The government will also create infrastructure for seaplanes to boost connectivity. SpiceJet has shown interest in bringing seaplanes to India and minister for road transport and highways Nitin Gadkari has also been pushing for such a proposal.