Healthy Budget For The Infrastructure Sector

The Finance Minister, in his latest budget, has taken a step forward to provide the much required thrust to the infrastructure sector. He has clearly stated that the government is all set to improve communications in its policies and is willing to remove any apprehension or distrust among investors. The message that has come across from his speech is that 'doing business in India' must be seen as an easy, friendly and mutually beneficial affair.

We are all aware that the infrastructure sector needs a large volume of investment. This fact is substantiated by the 12th five-year plan that projects an investment of Rs 55 lakh crore in this sector. The government has said that it is committed to bring in new and innovative instruments to mobilise funds for this order of investment.

The measures for the same are as follows: 

1) Infrastructure Debt Funds (IDFs) to be encouraged 
2) IIFCL to offer credit enhancement
3) Infrastructure tax-free bonds of Rs 50,000 crore in 2013-14
4) Building of roads in north-eastern states and connect them to Myanmar with assistance from WB & ADB.
5) Raising the corpus of Rural Infrastructure Development Fund (RIDF) to Rs 20,000 crore
6) Rs 5,000 crore to NABARD for financing the construction for warehousing. 
7) Window to panchayats to finance construction of godowns.

The government has also put in place and has committed the clearance of 3000 kms of road projects in Gujarat, Madhya Pradesh, Maharashtra, Rajasthan and Uttar Pradesh in the first 6 months of 2013-14. Also, it will set a regulatory authority for the road sector.

Looking at the budget, it can be said that it may bring positive signs for companies like IRB Infra, Sadbhav Engineering, Srei Infra to name a few.