Union Budget 2015-16: infrastructure investment rises by Rs70,000 crore

The union finance minister has proposed an increase the investment in infrastructure by Rs70,000 crore in 2015-16 over the current year.

Presenting the Budget 2015-16 in the Lok Sabha today, Arun Jaitley stated that the present state of infrastructure does not match the growth ambitions.

Hence he has increased outlay on both the roads and the gross budgetary support to the railways by Rs14,031 crore and Rs10,050 crore. The capital expenditure of the public sector units is expected to be Rs3,17,889 crore, an increase of approximately Rs.80,844 crore over 2014-15.

Underlining its commitment to reviving the investment cycle, Jaitley said public investment in the new fiscal year will be Rs1.25 trillion higher than the revised estimates of the last year, of which Rs70,000 crore will be directed towards capital expenditure.

He added that an aggregate annual increase of more than 0.5 per cent of gross domestic product (GDP) can be expected in public capital expenditure.

The allocation in the roads sector has been increased by Rs.14,031 crore and that in the railways by Rs.10,050 crore.

Listing infrastructure as one of the key challenges before the government, Jaitley said that to increase investment in the sector, public investment will to be increased because private sector investment is still muted and the public-private partnership (PPP) model is weak.

Jaitley also announced the formation of an investment and infrastructure fund and tax-free bonds for raising funds for investment in rail, road and irrigation infrastructure.

The finance minister stated that an annual flow of Rs20,000 crore will be ensured for the National Investment and Infrastructure Fund (NIIF). This will enable the Trust to raise debt, and in turn, invest as equity, in infrastructure finance companies such as Indian Railway Finance Corp Ltd and National Housing Board.