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Continuing its focus on infrastructure development, the government on Monday sought to give the sector a Rs 99,534 crore (Rs 995.34 billion) boost under a host of schemes, a move that has been welcomed by industry.
Presenting the interim budget for 2009-10 Finance Minister Pranab Mukherjee allocated Rs 40,900 crore (Rs 409 billion) for the Bhart Nirman project aimed at strengthening the country's rural infrastructure, including water supply, power, housing and roads.
The minister also proposed an expenditure of Rs 11,842 crore (Rs 118.42 billion) for the Jawaharlal Nehru National Urban Renewal Mission (JNNURM) apart from Rs 14,000 crore (Rs 140 billion) outlay for the Rural Infrastructure Development Fund (RIDF) with a separate window for rural roads to continue with a corpus of Rs 4,000 crore (Rs 40 billion).
The interim budget also envisages a planned outlay of Rs 10,000 crore (Rs 100 billion) for the Pradhan Mantri Gram Sadak Yojna, Rs 8,800 crore (Rs 88 billion) spending on rural housing and a total of Rs 9,992 crore (Rs 99.92 billion) for highway projects in various states and union territories.
"During 2005-2009, the allocation to this (Bharat Nirman) programme has been increased by 261 per cent. For the year 2009-10, I propose an allocation of Rs 40,900 crore (Rs 409 billion) for this programme," Mukherjee said.
Besides, Mukherjee also allowed the India Infrastructure Finance Company (IIFCL) to refinance 60 per cent of commercial bank loans for infrastructure projects under the public private partnership mode.
"We have taken a new initiative for providing refinance to the banks for long term credit extended to these (infra) projects. Accordingly, the government has decided that IIFCL will refinance 60 per cent of commercial bank loans for PPP (public private partnership) projects in critical sectors over the next 18 months or so," he said.
The announcements met with mixed reactions from industry with some players saying there is enough for the sector to look forward to, while others felt disappointed.
"The government has reiterated its commitment to the infrastructure sector by announcing allocations under JNNURM and RIDF. With the government reconfirming the commitment, there is enough for the infrastructure players to look forward to," Simplex Infrastructures Director Amitabh Das Mundhra told PTI.
Ispat Industries Vice-Chairman and Managing Director Vinod Mittal said, "I hope the over Rs 60,000 crore (Rs 600 billion) spending plan for construction of rural roads, irrigation and other infrastructure in rural areas under Bharat Nirman and other centrally sponsored projects would help generate additional demand for steel."
Pointing out that the government's measures would help in carrying on the momentum in the infrastructure sector, JK Lakshmi Cement whole-time Director Shailendra Chouksey said, "There were some expectations in the housing sector but we are disappointed. Overall there will be no significant changes in cement demand in the country."
Cement Manufacturers' Association President H M Bangur said irrespective of the announcements in the interim budget, if the GDP grows at 7-8 per cent, the cement industry would be happy as it is basically GDP-related.