Mumbai: India will invest as much as ₹ 2.21 trillion in creating and upgrading infrastructure in the next fiscal year, finance minister Arun Jaitley said in his budget speech on Monday.
Calling infrastructure investment the fifth support pillar in the transformation of India, Jaitley said the government was speeding up construction of new roads and upgrading state highways to national ones.
Together with the capital expenditure announced for the railways last week, the total capex outlay for roads and railways in 2016-17 will be “a mammoth ₹ 218,000 crore" Jaitley said.
“We further expect to approve nearly 10,000km of national highways in 2016-17. This will be much higher than the two previous years," he said.
Total capital expenditure outlay for infrastructure during the fiscal will be ₹ 221,246 crore, he said.
In 2015, India awarded the highest number of road projects by length and produced the highest number of motor vehicles, Jaitley said. “This is a sign of growth of the economy, but it presents a challenge also. Therefore, we have speeded up the process of road construction. I have proposed to allocate a sum of ₹ 55,000 crore in the budget for roads and highways."
The government plans to develop road projects spanning 50,000km and entailing investments of about $250 billion over the next five to six years, Mint reported on 17 February. The government has put infrastructure development at the top of its agenda.
Apart from the ₹ 55,000 crore, the road sector will see a further ₹ 15,000 crore being raised by the National Highways Authority of India (NHAI) through bond sales, Jaitley said. The total investment in the road sector including the rural Pradhan Mantri Gram Sadak Yojana allocation would be ₹ 97,000 crore, he said.
The pace of completion of road projects will also rise to 10,000km in 2016-17. In addition, nearly 50,000km of state highways will also be taken up for upgradation to national highways, Jaitley said.
“In the road sector, there were more than 70 languishing projects at the beginning of the year due to legacy factors. Aggregate length of these projects was 8,300km involving ₹ 100,000 crore investment," said Jailtey. “...nearly 85% of these projects have been put back on track."
NHAI has a target of awarding 10,000km of projects this fiscal year. Up to January, 6,353km of projects had already been awarded.
Shares of road developers rose in afternoon trading following the investment outlay in the budget. Sadbhav Infrastructure Projects Ltd’s shares were up 3.9% while IRB Infrastructure Ltd’s shares were up 1.17% on BSE in intra-day trading.