Mumbai, Feb 1 The infra industry has hailed the added focus the sector has received in the Budget, saying the proposals will give a big boost to this key growth driver.
The Budget has allocated Rs 3.96 trillion to infra sector to spur economic activities and create more jobs and has also accorded infrastructure status to affordable housing projects which will give lot of tax incentives to the players.
"The Budget augments the already established mode of using budgetary spend to boost infra segment. Integrated transportation focus, including railways, metros, multi-modal transport, highways, is transformational that can take growth into the next orbit," KPMG India's Manish Aggarwal said.
For the transport sector as a whole, including railways, road, shipping, the Government has made a provision of Rs 2.41 trillion in 2017-18.
"It is also noteworthy that Railways has been given due importance with a total outlay of Rs 1.31 trillion out of which Rs 55,000 crore is committed from the Budget.
"There is clear focus on rail safety with a national rail safety fund with a corpus of Rs 1 trillion for five years and passenger convenience through station redevelopment," said Deloitte Touche Tohmatsu India's Vishwas Udgirkar.
For highways, the budget allocation has been stepped up to Rs 64,000 crore from Rs 57,676 crore, he noted.
"In the aviation sector, select airports in tier-II cities have been proposed for development through PPP mode which will complement the regional connectivity plans.
"The Airports Authority of India Act will be amended to enable monetisation of land assets and unlock their value. But ports and shipping, one of the focus areas of the government, is a surprise omission in the Budget," he said.
Centrum Infra Advisory's Sandeep Upadhyay said, "Within the infra sector the focus continues to be on pushing capex in transportation sector with major impetus for the Railways. But the pace of rolling out infra projects including the need of single-window clearance and reforming PPP framework and dispute resolution with contractors are where the authorities really need to focus on."
Essar Ports' Rajiv Agarwal said measures including those in respect of public infra spending, rural spending and tax cuts will help increase consumption and help fasten growth The FM has also accorded infra status to affordable housing segment which is likely to boost the sector.
"The Budget provisions will have several spin-off benefits. Granting infra status and higher fund allocation for affordable housing (Rs 23,000 crore) is a welcome step," IMC's Deepak Premnarayen said.
Manish Agarwal, Partner and Leader Infrastructure, PwC said, "Increased spend on Road and Rail is welcome, as is proposed Amendment to AAI Act to encourage city side development. PPP Model for development of airports in Tier 2 cities will need to be seen. Recapitalisation of Banks will help to some extent."
Vipin Sondhi, MD & CEO, JCB India said Finance Minister Arun Jaitley has presented a well-balanced and constructive combined budget, focusing on the most critical aspects of the economy, such as Infrastructure, agriculture and rural India.
"The budget has managed to press key buttons that are necessary to bolster overall development of the nation...A record investment of Rs 3,96,135 crore for infrastructure, 1.31 lakh crore for railways is a big boost to the economy and a step in the right direction. Thrust on agriculture sector with credit set at Rs 10 lakh crore will aid country’s all round development," he said.
International Road Federation (IRF), a Geneva based global body working for better and safer roads has welcomed increased budget allocation for roads and highways, which will help in improving much needed India’s road transport infrastructure.
"The increase in budget allocation for roads and highways to Rs 64,000 crore from Rs 57,676 crore and earmarking of Rs 27,000 crore for rural roads in the Financial Year 2018 is welcome as this will help improve infrastructure," said K K Kapila chairman, IRF.
Vikash Kumar Sharda, Director, Capital Projects & Infrastructure, PwC, said the Budget focuses on rural roads and the Highway Ministry needs to mobilise additional resources to achieve the target of road development.
Pirojshaw Sarkari, CEO, Mahindra Logistics said, "The recent budget has been extremely positive for logistics sector since it puts huge emphasis on infrastructure segments such as highways, railways, ports and aviation. Any expansion or enhancement of transportation infrastructure or even increase in consumption directly benefits the logistics sector."
Julian Bevis, Senior Director, South Asia, Maersk Group in response to the Union Budget said India has has the opportunity to increase its share in global trade and a 10 per cent reduction in trade costs can boost the country’s competitiveness and contribute additional revenues of up to USD 5.5 billion annually.
"Maersk welcomes the Budget’s proposed increase in expenditure on infrastructure for improving coastal road connectivity from ports to the hinterland, expanding railway connectivity, introducing end-to-end integrated transport solutions in partnership with logistics players, and encouraging public private partnerships for airport developments in certain smaller cities," he said. MOREThese efforts complemented by timely implementation of
GST, building of multi modal parks, increased emphasis on digitisation for greater transparency and the introduction of a trade infrastructure export scheme will all collectively boost quicker inland movement of cargo, he added.
Adarsh Hegde, Joint Managing Director, Allcargo Logistics said, "The Union Budget 2017 with an agenda to transform, energise and sanitise India is reasonably balanced for an inclusive growth of the Indian economy."
Akhil Sambhar, Tax Partner, Infrastructure practice, EY India said, though the budget for fiscal year 2017-18 has not seen much tax sops being given out for the infrastructure sector but steps have been taken to rationalise tax provisions, curb and dis-incentivise black money, promote digital economy, bring transparency etc which should help in achieving good governance.
Vishvaraj Infrastructure Ltd Chairman and Managing Director Arun Lakhani commented, "A big infrastructure push along with a substantial hike in provisions for the National Highways in the Union Budget for 2017-18 is a major takeaway. A 25 per cent higher capital expenditure is sure to give the economy a big growth momentum."