The concrete estimates in Union Budget 2017-18 are liable to change, since the GST couldcome into play within a few months, leading to a transformation of the tax collection system.The budget also doesn’t take the impact of demonetisation into account because data is stilllacking. Hence the growth estimates are also liable to have major errors.
But we can assume that the budget is a statement of intent and there has clearly been anattempt to focus on infrastructure. Several areas were referenced. The total allocation for infra-structure development in 2017-18 stands at Rs 3.96 trillion, which is about 2.5 per cent of GDP.
Housing, specifically affordable housing, will receive infrastructure status with the NationalHousing Bank also refinancing individual housing loans of about Rs 200 billion in 2017-18. Thisis clearly an attempt to throw a lifeline to the real estate sector, which has been hard hit.
The transport sector received a fair amount of space in the budget speech. The sector as awhole, including rail, roads and shipping, received an allocation of Rs 2.42 trillion in 2017-18.
This was the first budget in 92 years to amalgamate the Railway Budget. Indian Railwaysreceives funding of Rs 550 billion from the centre as a contribution to its total expenditure of Rs 1.31 trillion. There will be a four-pronged focus on passenger safety; capital and developmentworks; cleanliness; and finance and accounting reforms. IR will commission 3,500 km of lines in2017-18, as against 2,800 km in 2016-17. About 25 stations are expected to be awarded during2017-18 for station redevelopment and 500 stations will be made more accessible for the differ-ently abled. Solar power will also be installed across 7,000 stations in the medium term with workstaken up for 1,000 stations for the National Solar Mission.
A new Metro Rail Act will be enacted by rationalising the existing laws. This will facilitategreater private participation and investment in construction and operation of metro systems.
Among other transport segments, the allocation for highways has been raised to Rs 649 bil-lion from Rs 579 billion and 2,000 km of coastal connectivity roads have been identified for con-struction. Select airports in Tier 2 cities will also be taken up for operation and maintenance inthe PPP mode and the Airports Authority of India Act will be amended to enable effective mon-etisation of land assets.
In the telecom sector, optic fibre has already been laid across 155,000 km and the allocationfor the BharatNet project has been increased to Rs 100 billion in 2017-18. By the end of 2017-18,high speed broadband connectivity on optic fibre will be available in more than 150,000 gram pan-chayats, with Wi-Fi hotspots and access to digital services at low tariffs.
The strategic crude oil reserves are being expanded, with two more caverns set up, which willtake the strategic reserve capacity to 15.33 million metric tonnes (about 25 days of consumption).The finance minister also indicated that the government would like to set up an integrated oil majorwith a presence across the entire value chain. In solar energy, the second phase of solar park devel-opment will be started, to create another 20,000 MW of capacity.
Apart from the plans outlined in the document, the government will of course, have to contin-ue trying to unclog the processes which cause persistent delays in project uptake. Given the eco-nomic slowdown, enhanced activity across the infrastructure space could be the most productiveway to infuse new energy into the economy.