Yashwant Sinha has stepped up public investment in key infrastructure
sectors. The Plan outlay, inclusive of internal and extra budgetary
resources, in power, roads, and national highways
and railways has been increased by 22 per cent, 39 per cent and 23 per
cent respectively, to a total of Rs 37,919 crore.
The Accelerated Power
Development Programme (APDP) has been redesigned as the Accelerated
Power Development and Reform Programme (APDRP), with an enhanced plan
allocation of Rs 3,500 crore for 2002-03, up from Rs 1,500 crore this
year. Access of the states to the fund will be on the basis of agreed
reform programmes, the centre piece of which would be the narrowing
and ultimate elimination of the gap between unit cost of supply and
revenue realisation within a specified time frame. Accordingly, the
focus of reform has shifted from generation to transmission and
A high-level monitoring group
will oversee the progress of this programme. Allocation for this
programme will be augmented by loans on concessional terms from the
Power Finance Corporation (PFC).
While stating that the
National Highway Development Programme (NHDP) launched three years ago
was "progressing well," Sinha announced that the Golden
Quadrilateral Project connecting the four metros would be completed by
December 2003 a year ahead of schedule. He said the project would
achieve financial closure by the end of fiscal 2002 through
multilateral funding and borrowings by the National Highway Authority
of India (NHAI) with government guarantees.
The finance minister has
proposed the corporatisation of the major ports in a phased manner.
Stating that 17 projects worth more than Rs 4,500 crore had already
been approved and another eight projects worth more than Rs 3,200
crore were under consideration, Sinha said private investments in the
port sector would be stepped up and the regulatory structure would be
The government had recently
announced the upgradation of the international airports at Delhi,
Mumbai, Chennai and Kolkata through private sector participation.
Sinha announced that the modalities for inviting offers had been
finalised and the process will be completed by the end of the next
To encourage private sector
participation in greenfield airports, Sinha announced a package of
- Availability of land and
related infrastructure from the state governments.
- Exemption from levy of
Inland Air Travel Tax (IATT) and Foreign Travel Tax (FTT) on
departing passengers for projects located in states that charge
sales tax on aviation turbine fuel (ATF) at central sales tax
- Charging of advance
development fee (ADF) by way of additional passenger service fee (PSF)
at the existing airports for help in financing of the greenfield
- Levy of user development
fee (UDF) at the new airport.
assistance/equity participation by the Airports Authority of
The proposed new airports in
Bangalore and Hyderabad will benefit from these concessions.
Sinha has proposed an Urban
Reform Incentive Fund (URIF) with an initial allocation of Rs 500
crore to provide reform-linked assistance to the states. The fund will
seek to incentivise reforms in the following areas:
- Reform of rent control
laws and repeal of the Urban Land Ceiling Acts.
- Rationalisation of high
stamp duty regimes.
- Revision of bye-laws to
streamline the approvals process for construction of buildings,
development of sites, etc.
- Revision of municipal laws
in line with model legislation prepared by the Ministry of Urban
Development and Poverty Alleviation.
- Simplification of legal
and procedural frameworks for conversion of agricultural land for
- Levy of realistic user
charges and resource mobilisation by urban local bodies.
- Initiation of public
private partnership in the provision of civic services.
Sinha also announced the
setting up of a City Challenge Fund (CCF) to finance the transitional
costs of moving towards sustainable and creditworthy institutional
systems of municipal management and service delivery.
The FM also proposed a Pooled Finance Development Scheme to assist
local bodies to access the markets based on their creditworthiness. To
provide a further incentive for urban local bodies to become
creditworthy and to invest in urban infrastructure, Sinha announced
the issue of municipal tax free bonds up to Rs 500 crore in 2002-03,
up from Rs 200 crore in the current fiscal.
The Plan Outlay for tourism
has been increased by 50 per cent to Rs 225 crore for 2002-03. Sinha
has proposed a comprehensive tourism development package. The main
features of this package are:
- Six tourism circuits will
be identified for development to international standards during
- Special Purpose Vehicles (SPVs)
will be permitted to raise resources from both public and private
sectors for infrastructure development in these circuits.
- The Hampi site in
Karnataka will be developed as an international destination for
tourism based on an integrated master plan.
Sinha has proposed the
following measures to facilitate faster private investment in
- An Infrastructure Equity
Fund of Rs 1,000 crore will be set up to help in providing equity
investment for infrastructure projects. Contributions to the fund,
which will be managed by the Infrastructure Development Finance
Company (IDFC), will initially come from public sector insurance
companies, financial institutions and some banks.
- An institutional mechanism
will be set up to coordinate the debt financing by financial
institutions and banks of infrastructure projects larger than Rs
250 crore. IDFC will act as the coordinating institution with
primary responsibility for the different sectors being shared with
the IDBI and ICICI.
partnerships will be encouraged for the
provision of infrastructure facilities, the modalities for which
are being worked out by a task force.