Union Budget 2015: Government to set up Rs 20,000 crore infrastructure fund, auction projects with clearances

NEW DELHI: The government has proposed to set up a Rs 20,000 crore fund to finance infrastructure projects and permit debt-free bonds in rail, road and irrigation sectors.

Finance Minister Arun Jaitley said in his budget speech on Saturday that the government intends to auction infrastructure projects, after obtaining all regulatory clearances, including five ultra mega power projects worth Rs 1 lakh crore.

The National Investment and Infrastructure Fund (NIIF) with an annual flow of Rs 20,000 crore will raise debt and invest as equity in infrastructure finance companies such as IRFC and NHB. The infrastructure finance companies can then leverage this extra equity manifold, Jaitley said.

The minister said that he intends to permit tax-free infrastructure bonds for the projects in the rail, road and irrigation sectors. He also said that the public-private-partnership (PPP) mode of infrastructure development needs to be revisited and revitalised.

The government proposes to set up five new ultra mega power projects of 4000 mw in the plug-and-play mode, which means all clearances and linkages will be in place before the projects are awarded, Jaitley said.

Similar plug-and-play projects will be considered in other infrastructure projects such as roads, ports, rail lines and airports, the minister said.

Jaitley proposed an increase in outlays on roads by Rs 14,031 crore and the gross budgetary support to the railways by Rs 10,050 crore respectively. He said the capex of public sector units is expected to be Rs 3,17,889 crore in 2015-16, an increase of Rs 80,844 crore over that in the current fiscal.

The minister also proposed to introduce a regulatory reform law that will bring about cogency of approach across various sectors of infrastructure to tackle the lack of common approach and philosophy in the regulatory arrangements in different sectors.