Government increases infrastructure funding

Infrastructure development continues to be a priority area for the United Progressive Alliance (UPA) government with Finance Minister Pranab Mukherjee increasing public investment in this sector.

"The investment in infrastructure for the growth of economy is critical. I have urged my colleagues in the central and state governments to remove policy, regulatory and institutional bottlenecks for speedy implementation of infrastructure projects," Mukherjee said while presenting annual budget for 2009-10 in parliament Monday.

"I, on my part, will ensure that sufficient funds are made available for this sector," he said.

"To ensure that infrastructure projects do not face financing difficulties arising from the current downturn, the government has decided that IIFCL will refinance 60 percent of commercial bank loans for PPP (public-private partnership) projects in critical sectors over the next 15 to 18 months."

According to him, IIFCL (India Infastructure Finance Co Ltd) and banks are now in a position to support projects involving a total investment of Rs.100,000 crore.

The minister also increased by 23 percent the allocation for National Highways Authority of India (NHAI) for road development in the country.

Also, the budget allocation for the railways has been increased from Rs.10,800 crore made in the interim budget to Rs.15,800 crore.

In order to step up urban infrastructure, the finance minister increased allocation for the Jawaharlal Nehru National Urban Renewal Mission by 87 percent to Rs.12,887 crore in the current budget.

Apart from that, Mukherjee has also proposed to enhance the allocation for housing and provision of basic amenities to urban poor to Rs.3,973 crore in the current year's budget.

Similarly, allocation for rural roads scheme raised by 59 percent.

The government has also decided to raise the allocation to Bharat Nirman, a rural infrastructure development project, by 45 percent.

Last updated on Jul 6^th, 2009 at 17:56 pm IST--IANS