INFRASTRUCTURE SECTOR

& INFRASTRUCTURE
POLICY: IS THERE A BIG
BOOST?

Presented by:
Manoj Kumar
Ravi Kumar Sihag
C Sameer Raja
Rajanikant Chilumula
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WHAT IS INFRASTRUCTURE?

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WHY INFRASTRUCTURE?

Demanded by

Population & economic growth

If poor Low grade of public service

Poverty
Infrastructure
GDP bottleneck

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WHAT IS MAGIC OF
INFRASTRUCTURE
DEVELOPMENT?

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NATIONAL
INFRASTRUCTURE
• World-class infrastructure, improve quality of life
• 111 lakh crore infrastructure projects during 2020-25
PIPELINE
• Budget 2020-21 increased no. of projects in NIP from
~6800 to 7400
• 1.10 lakh crore projects are already completed

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UNION BUDGET 2020-21

• Roads and Highways

• Maximum allocation ever – 1,81,101 crore
• More projects under Bharatmala
• Railways
• National Rail Plan, 2030
• 100% electrification by 2023
• DFCs to be commissioned by June, 2022
• Passenger safety – LHB coaches
• Indigenously developed automatic train protection system
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UNION BUDGET 2020-21

 Urban infrastructure
 Expansion of metro rail network and city bus service :
Metro Lite and Metro Neo
 Innovative PPP model
 Power infrastructure
 Revamped reform based, result linked power distribution
sector scheme – 3.05 lakh crore
 Comprehensive National Hydrogen Energy Mission
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Union Budget 2020-21

 Petroleum and Natural Gas

 Extension of Ujjwala scheme
 City Gas Distribution network
 Independent Gas Transport System Operator
 Ports, Shipping, Waterways
 7 new projects for major ports
 Recycling of ships

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 INFRASTRUCTURE FINANCE
‘Patient Capital’ is needed
• Existing financial institutions can’t cater to needs
• Three thrust areas to increase funding for infrastructure
1. Creation of institutional structures
2. Focus on monetizing assets
3. Enhancing the share of capital expenditure.
• To increase foreign investment into infrastructure funding
• Allowed Infrastructure Debt Funds (IDFs) to raise capital by issuing
zero coupon bonds
• FPIs are now allowed to subscribe to debt instruments of INVITs
(Infrastructure Investment Trusts)
DEVELOPMENT FINANCIAL INSTITUTION
Developmental and • High risk appetite

Financing role • Fulfilling requirements of National

Infrastructure Pipeline

 With a capital of 20,000 crore

Features  Loan portfolio of 5 lakh crore in next 3 years
 Legislative backing

Implementatio  Learning from past experiences

n is the key
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IS THERE A BIG BOOST?

• 34% increase in capital expenditure to 5.54 lakh crore
• Developmental Finance Institution with ‘professional management’
• Innovative use of INVITs and REITs
• Focus on ‘Asset Monetization’ for optimum use of available resources
• Focus on urban infrastructure including tier-2 and tier-3 cities
• Boosting connectivity across sectors would result in reduction in
logistics cost
• Multiplier effect on employment generation and economic development

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QUESTIONS TO BE ANSWERED
• Revenue expenditure disguised as capital expenditure
• How professional the management of DFI will be?
• How can we attract foreign investments before creating
conducive environment?
• Problems in infrastructure lie beyond investment alone
• Issues with Asset Monetization – legal hurdles, asset titles,
encroachment
• Liquidity support to DISCOMs is not enough
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 “Overall, the union budget
2021-22 admirably rises to the
challenge of creating an
enabling environment to deliver
on the promise of National
Infrastructure Pipeline in the
next few years”
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THANK YOU

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