News
Monday, June 01, 2015
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1. Govt-to-govt funding: With focus on greater access to resources, RoadMin
examines plan
2. Growth faster than China? India's road, rail drive could lay doubts to rest
3. Government spending: Numbers don’t lie
4. NITI Aayog moots national policy to make PPPs more effective
5. GDP growth comes in at 7.5% in last quarter
6. PM defends land order, says satisfied with reform pace
7. Board likely for proposed infrastructure fund
8. Infrastructure push from overseas: Companies from friendly nations like
Malaysia and Japan may build highways in India
9. Govt approves Rs 4318.28 cr DMIC infra projects in Gujarat, Maharashtra
10. Gujarat to get one lakh new houses in five years, govt to announce redevelopment
plans
Govt-to-govt funding: With focus on greater access to resources, RoadMin
examines plan
Indian Express
June 1, 2015
The ministry of road, transport and highways (MoRTH) is examining a proposal to liberalise
norms and allow government-to-government funding to mobilising additional resources for
road development programmes.
Under the current norms, Exim (Export-Import) Banks of foreign countries are not permitted to
lend resources to concessionaires based in their home states to develop highway projects in
India.
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A senior official in the know said, “As per extant regulations, government-to-government
funding is not possible. One has to go in for open tendering. We are examining a proposal to do
away with this requirement to mobilise resources for construction of highway projects.”
As per the model being examined, economically viable stretches of highways can be identified
and put up for development as per the proposed financing norm to attract foreign participation
in the sector.
“We want both domestic as well as foreign infrastructure development firms to participate in
highway projects to avoid cartelisation. We are examining measures so as to ease financing
constraints”, added the official. The government’s efforts to ease norms for financing highway
projects come at a time when foreign participation as well as investments from domestic
private-sector firms have petered out due to regulatory hurdles and weak economic sentiments.
Private road developers, including infrastructure majors GVK, GMR and Larsen & Toubro, have
stopped investing in road projects owing to land acquisition problems and funding constraints
in the last few years.
And at the same time, the NDA government led by Prime Minister Narendra Modi has drawn up
an ambitious target to award highway projects worth Rs 3.5 lakh crore in the next six months.
Last Thursday, Union minister for road, transport & highways Nitin Gadkari said,
“Infrastructure plays a pivotal role in bolstering the economy and finance minister Arun Jaitley
has requested us to increase our targets to award Rs 3.5 lakh crore highway projects in the next
six months.” As many as 1,231 projects measuring 37,000 km have been firmed up for award by
the ministry this fiscal.
The government has given the go-ahead to the Bharat Mala project aimed at developing 5,600
km of new roads in border areas at an estimated cost of Rs 56,000 crore. Another 4,700 km of
roads to connect religious and tourism centres and to enhance connectivity in backward areas is
expected to come up at an estimated cost of Rs 44,000 crore. Besides this, world-class highways
will be developed to connect 100 of the 676 district headquarters in the country.
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Growth faster than China? India's road, rail drive could lay doubts to rest
Hindustan Times
June 1, 2015
Prime Minister Narendra Modi's reformist, but hard-up government has begun a splurge on
road and rail building that analysts say could remove doubts over whether economic growth in
India really is overtaking China.
Having roughly doubled spending allocations for roads and bridges in fiscal 2015/16, and raised
the rail budget by a third, Modi is banking on India going faster.
"They have acknowledged that infrastructure is the big elephant in the room," said Vinayak
Chatterjee, head of infrastructure services company Feedback Infra.
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"Once these measures are implemented, the elephant would start dancing, and with it the
overall economy."
Modi's chief economic advisor, Arvind Subramanian, reckons growth could increase by more
than one percentage point this year provided ministries don't underspend, though the central
bank saw it adding just half a point.
Data released on Friday showed the economy grew 7.5% in the quarter ending in March, easily
outpacing China. Many economists suspect, however, that the government statisticians' new way
of counting GDP overstates how well India is doing.
Those worries might fade if Subramanian is right about the impact infrastructure spending will
have on India's under-achieving economy.
Success rests on whether ministries spend the extra $11 billion they were allocated for
infrastructure this fiscal year. They got off to a fast start in April, spending $6 billion of the $38
billion capital expenditure budget for 2015/16.
Stepping up
The government has prioritised unblocking infrastructure projects that had gathered dust
because of either an obstructive bureaucracy, a lack of private sector investment, or in some
cases public interest litigation.
Weighed down with heavy debt, and having posted their worst results in five years, big Indian
corporates are in little rush to make fresh investments, while public sector banks may require
recapitalisation before they are ready to lend the sums needed. That has made the government
step up to the plate.
Take Delhi's Eastern Peripheral Expressway, for example.
Part of a six-lane ring-road for the capital, the project was first mooted nine years ago but failed
to attract private bidders. Unwilling to wait any longer, the road ministry intends spending
almost $1 billion building the 135 kilometre loop.
Last month, the cabinet approved a policy that will provide private developers with a $470
million bailout in order to complete 16 highways.
The government has also put $3 billion of seed capital into a new infrastructure fund, with the
hope of attracting up to $30 billion of private money.
Some rules have been eased for the private sector, and financially stressed companies are now
allowed to exit projects. And in future, public tenders will only be launched after all approvals
have been secured - addressing a major reason why so many projects stalled.
As a result the government hopes road building will accelerate to 30 km a day by the end of next
year from 12 km at present, as it plans to award projects for 10,000 km of road this year, up 25%
from a year earlier.
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Some bureaucrats suspect that the government has underestimated how much money is needed.
Planned road projects alone will cost $17 billion this year compared with a budget allocation of
about $7 billion. To cover most of the gap, the road ministry plans to raise a $7 billion loan.
"We don't have enough money to build all these roads," Rohit Kumar Singh, a mid-level
bureaucrat at the ministry, told Reuters. "We need to leverage private sector funding."
A clear, consistent policy on tolls needs to be put in place for the private sector to become more
active, Virendra Mhaiskar, managing director of IRB Infrastructure Developers Ltd, one of
India's largest road builders, told Reuters.
"You have to create an environment where investors and lenders can make a return," Mhaiskar
said.
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Government spending: Numbers don’t lie
MINT
June 01, 2015
The best way to judge what any government really believes in is not to listen to what it says, but
to consider instead what it does. And there is no better way of finding out what is close to
the Narendra Modi government’s heart than to check what it spends its money on. The
provisional estimates of the Union government’s expenditure for 2014-15 are now out, giving us
an idea about what the government spent on, compared to what it had promised in its budget.
These numbers don’t lie.
Remember Modi’s famous 5 Ts? To build brand India, he had said, he would focus on five Ts—
talent, tradition, tourism, trade and technology. At least as far as tourism is concerned, the
government isn’t putting its money where its mouth is. It spent only 46% of the budgeted plan
expenditure on tourism during the fiscal year.
Recall all the talk about the focus on renewable energy? That turns out to have been mostly hot
air, as seen from the mere 53% of the budgeted amount spent during 2014-15 by the ministry of
new and renewable energy. Similarly, the Prime Minister has made no secret of his fondness for
yoga. But spending by the department of Ayush (ayurveda, yoga and naturopathy, unani, siddha
and homoeopathy) has been a mere 43% of the budgeted plan expenditure. Indeed, the ministry
of health and family welfare has spent only 76% of the amount it was allowed as plan
expenditure under the 2014-15 budget.
Does the government’s heart bleed for the poor and is housing for the masses a priority? The
government has often expressed its concern for these matters. But facts on the ground don’t
seem to support what it says—spending by the ministry of housing and urban poverty alleviation
was a mere 45% of the budgeted amount. Much has been said about the need to raise
agricultural productivity and crop yields. But precious little has been done in the Modi
government’s first year in office. The department of agricultural research and education has
spent just two-thirds of what it was allowed under the budget.
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Talking about smart cities is in vogue. But our present un-smart cities don’t get much money.
Spending by the ministry of urban development was 60% of the budget. You can’t do much
development with cuts of that magnitude.
The government has repeatedly said that water will become a pressing issue for the country. Yet
the ministry of water resources’ plan spending was a mere 37% of its budget. And for all the
tom-tomming about the government’s Clean India campaign, spending by the ministry of
drinking water and sanitation was 79% of the budgeted plan expenditure in the last fiscal year.
But what did the government spend on? In one word, infrastructure. The ministry of road
transport and highways spent 95% of its budget, and the railways used up 96%. The
government’s focus on infrastructure is very clear—this is one sector where its spending record
matches its talking record.
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Modi is also very serious about the Make in India campaign, seen from the fact that the
department of industrial policy and promotion spent 97% of the amount allotted to it in the
2014-15 budget. The Digital India initiative is another pet project, evident from the 89% spent
by the department of electronics and information from its budgeted amount. But spending by
the department of telecommunications was a mere 38% of its budget allocation.
Has the Modi government cut back on social spending across the board? Not really. The women
and child development ministry spent a decent 87% of the budgeted plan expenditure. The
ministry of rural development saw its plan spending cut to 83% of the budgeted amount. The
human resource development ministry’s spending was 80% of its budget. While these cuts have
affected social programmes, they are not huge compared with some of the examples given
above.
The details of plan expenditure as a percentage of the budgeted amount, along with those of
many other ministries and departments, are given in the accompanying chart. They have been
culled from the website of the Comptroller General of Accounts, which has recently put out the
provisional estimates of the Union government’s accounts for 2014-15.
The government had slashed spending in the last financial year in a desperate effort to rein in
the fiscal deficit and the axe has fallen brutally on plan expenditure. Nevertheless, as the details
show, the cutbacks have been far from uniform and the pattern of spending gives one a fair idea
of where the government’s priorities lie.
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NITI Aayog moots national policy to make PPPs more effective
Economic Times
June 01, 2015
Government's think tank NITI Aayog has proposed framing of a comprehensive national policy
to regulate public-private partnerships so as to make such agreements more effective.
The Arvind Panagariya-headed think tank, which replaced the erstwhile Planning Commission,
has also proposed a dedicated institutional structure that would ensure enforcement and
monitoring of these concession agreements to protect the interests of public authorities as well
as private investors.
Currently, India has more than 900 public-private partnership, or PPP, projects —considered
crucial to meet the country's huge infrastructural gap — at various stages of implementation, but
a lot of them are stalled for various reasons.
A senior government official told ET that the Aayog will shortly send its detailed
recommendations to the recently set up Vijay Kelkar panel on how to revive PPP model in the
country with an emphasis on social sectors. "There is aneed to formulate a comprehensive
National PPP policy, incorporating broad procedures and processes for adoption of a uniform
approach on key issues that have impacted the growth of PPPs in recent times," the Aayog has
said in its recommendations that have already been submitted to the Prime Minister's Office for
consideration.
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The government had last week appointed former finance secretary and economist Vijay Kelkar
to head a panel that will recast the model of infrastructure development though the PPP model,
months after finance minister Arun Jaitley had said in his budget speech that the current model
was not robust enough. The government wants to reduce risk for the private companies to
increase investments in infrastructure.
Noting that the PPP mode of project implementation has been uneven across sectors and states,
the Aayog said that while it has taken off in sectors like roads, ports and electricity generation, it
is yet to take off in sectors like railways, civil aviation and "social" sectors. "Further,
geographical spread of PPPs is also not uniform and states like Madhya Pradesh, Andhra
Pradesh and Maharashtra are much ahead of others in implementing PPPs. Hence, there is need
to enhance private investment and coverage in untapped sectors particularly in the social
sectors," it said in its recommendations.
Prime Minister Narendra Modi, who is also the chairman of Aayog, has envisaged robust targets
under the government's social sector initiatives, including houses, toilets, electricity and clean
drinking water for all besides the Skill India initiative. This would require significant investment
and involvement of private players considering the limited fiscal capacity of the government to
invest.
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GDP growth comes in at 7.5% in last quarter
Financial Express
June 01, 2015
In February, the Central Statistics Office had said India grew faster than China in the third
quarter of the last fiscal, but on Friday it almost changed tack and said this feat was actually
achieved in the last quarter, even as economists only became more doubtful whether the CSO’s
new-series data were indeed consistent with reality. While high-frequency data suggested a
marked sequential slowdown from Q2 itself that accentuated in Q4 than in Q3, the CSO put the
Q4 real GDP growth at an impressive-looking 7.5%, faster than China’s 7% in the first quarter of
2015, and the expansion in the previous quarter at 6.6%, down sharply from 7.5% estimated just
two months ago.
With significant changes in the GDP growth figures for the first and second quarters also to 6.7%
and 8.4%, respectively — from 6.5% and 8.2% estimated earlier — overall economic growth in
FY15 has now been estimated at 7.3%, compared with 7.4% assumed in the advance estimate in
February. CSO officials attributed the large revisions, which also reflected in estimates of real
gross value added (GVA) in major sectors like manufacturing, agriculture and construction, to
additional data that came in after the advance estimate.
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While growth in real GVA for FY15 is estimated at 7.3%, among major sectors manufacturing
showed a rather sharp pick-up from the previous year — the growth in GVA in the sector rose to
8.4% in Q1 and after a dip to 3.6% in Q3, again to a healthy 8.4% in Q4. Agriculture, however,
contracted in Q3 and Q4 — by 1.1% and 1.4%, respectively.
Reflecting the sharp cut in expenditure by the Centre in the last quarter — capital spending was
some Rs 1.2 lakh crore less than initially budgeted — government consumption expenditure,
which rose an annual 27.5% in Q3, declined 7.9% in Q4 to form just 8.2% of GDP (at 2011-12
prices).
Gross fixed capital formation, one of the closest proxies of investment, and making nearly 30%
of GDP, grew 4.6% in FY15 compared with 3% in FY14 and -0.3% in FY13, signalling gradual
recovery.
Chief economic adviser Arvind Subramanian, who earlier in the week listed out the positives like
a decline in “(project) stalling rate” and “start of a pick-up”in real bank credit growth in Q4FY15,
said Friday’s data had borne out his assumptions. Sectors that are more amenable to
government policies such as manufacturing and services had done well, he said, adding that
agriculture, vulnerable to the monsoon, and exports, susceptible to global demand and prices,
remained the laggards. The farm sector would do better in the current fiscal, he said.
Subramanian, who has been advocating increased public spending to spur an incipient pick-up
in private consumption, recently said the budgeted levels of capital expenditure by the Centre
and states was to increase from 4.6% of GDP in FY15 to 5.1% in the current fiscal. The finance
ministry said in a statement: “..manufacturing growth increased substantially from 5.3% in FY14
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to 7.1% in FY15 while services growth increased substantially to 10.2% in FY15 from 9.1% in
FY14. Within services, financial, real estate and professional services increased from 7.9% in FY
2013-14 to 11.5% in FY 2014-15.”
Nomura said: “Overall, (the new data) depict an economy that is recovering, but at a very
gradual pace. We expect the cyclical sectors to show a gradual recovery in the coming quarters
owing to higher disposable income, easier financial conditions, rising profit margins and
continued momentum on project clearances. We expect growth to pick up to 8% y-o-y in FY16
from 7.3% in FY15. Weak monsoons are a key downside risk to our growth projections. We
expect the Reserve Bank of India to cut the repo rates by 25 basis points on June 2, followed by a
prolonged pause until end-2016.”
Subramanian too was a bit cautious on the FY16 estimate when he said that “a slightly bolder
thing that we said (earlier) was that FY16 will be better than FY15 by a margin greater than
between FY15 and FY14”. According to Shilan Shah, India economist, Capital Economics,
London, “At face value, Friday’s GDP figures suggest that India is the fastest-growing major
economy in the world. In reality though, the GDP data remain wildly inconsistent with
numerous other indicators that point to continued slack in the economy. big picture is that the
official GDP data are overstating the strength of the economy, most probably by a significant
margin.” Despite the contraction in exports in five months to April, there was an improvement
in net exports in Q4 as the imports have come down sharply, but it was still to turn positive as
some analysts expected.
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PM defends land order, says satisfied with reform pace
PTI
June 01, 2015
In an interview with PTI, Prime Minister Prime Minister Narendra Modi opened up about his
government's performance over its first year in office, the tasks he has outlined as high
priorities, and what he feels about the opposition attacks on the government's policies.
Q: Sir, you have completed one year as Prime Minister. Can you please sum up your experience?
A: When I took office, the civil service was totally demoralised and afraid of taking decisions.
The Cabinet system was also in disrepair due to the operation of extra constitutional authorities
from outside and groups of ministers from inside. There was a gulf between the states and the
Centre and high degree of mistrust. Foreigners as well as Indians felt despondent about Indian
governance. Changing that atmosphere of gloom was a very challenging task and I faced many
difficulties in rectifying the situation and bringing back confidence and hope.
Q: Soon after becoming the Prime Minister, you had said that you are trying to understand
Delhi since you were new here. Have you understood Delhi?
A: When I referred to Delhi, I meant the Central Government. My experience is that Delhi
behaves the way the leadership defines. Our team has worked to bring in changes in the work
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culture of Delhi for making the Government more pro-active and professional. When I assumed
office, I found that the corridors of power in Delhi were littered with lobbies of various kinds.
The task of cleaning the corridors of power (or cleaning the lobby of lobbies) was important so
that the government machinery itself is improved. This process of correction and cleaning took
quite some time but it will provide long term benefits in the form of clean and fair governance.
Q: And what have you understood?
A: One thing I fail to understand in Delhi is how the same parties which as State Governments
seek amendments to the Land Acquisition law, suddenly become opponents of the amendments
when they are sitting in Delhi.
Q: Looking back at this one year, do you think there is something which you could or should
have done differently than you did?
A: I had two options. One option was to do things methodically to mobilise the government
machinery, correct the many defects and ills which had crept into the system, so as to provide
long term benefits to the country in the form of clean, efficient and fair governance. The second
option was to use the mandate to announce new populist schemes and bombard the media with
announcements to keep the people fooled. The latter course is easier and people are used to it.
However, I did not choose this and instead chose the more difficult path of correcting the
defective government machinery in a quiet and methodical way. If I had chosen the populist
course, it would have been a breach of the trust placed in me by the people.
Q: During the first year, you initiated a number of programmes and schemes like Swacch
Bharat, toilets for schools, Jandhan, insurance for poor, pension scheme. What are the plans for
the future?
A: First, I should mention that Swacchh Bharat and school toilets are not merely for cleanliness.
The provision of toilets is a minimum requirement for the dignity of our women and it is
unfortunate, that we have not done this so many years after independence. Our future focus will
be on women, farmers, the urban poor and on employment. Whatever we have started, needs to
be taken forward and into the villages and municipal areas. We have to address the issues which
prevent clean cities, clean rivers, regular, uninterrupted supply of essentials like water and
electricity. We have to carry out reforms which help us in making 50 million houses for the
house-less. We have to see that all regions of the country, particularly the east and west, are
brought on par in development parameters. We have to build the capacity of our institutions,
employees and workers. Our regulatory environment has not been encouraging to research,
innovation and enterprise. Our boys and girls are doing so well in other countries, but we are
not able to use them effectively at home. We have made a beginning by setting up the Atal
Innovation Mission (AIM) and Self-Employment and Talent Utilisation (SETU). A common
requirement for all of these is corrections in our policy regime and also, in the administrative
culture.
Q: You wanted to push economic reforms at fast pace. But some key reform bills
like Land Acquisition and GST have faced problems. Do you think obstacles posed
to such reform measures are hurting the country? What will be your message to
those opposing these measures?
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A: Both the GST and the proposed Land Acquisition Bill are beneficial for the
country. The core essence of these Bills should be appreciated by all the parties
keeping aside political motives. Long-term interest of the nation should be
foremost. The fact that the States have agreed to the GST design shows the
maturity of our federal system and the GST Bill has already been passed by the Lok
Sabha. It is a matter of time before these bills are passed.
Q: If the reform measures are not pushed fast, what kind of a message will it send
to foreign investors particularly since you have been making utmost efforts to
bring maximum investments?
A: One of the peculiarities of Delhi is that the term ‘reform’ is associated only with
passing of laws in Parliament. In fact, the most important reforms are those
needed, without new laws, at various levels of Government, in work practices and
procedures. We have initiated a number of major reforms. These include
decontrol of diesel prices, direct transfer of cooking gas subsidy, enhancement of
FDI limits, revamping of railways and many others. The truth is that reforms have
actually been pushed very fast and as a result, FDI has already witnessed an
increase of 39 percent in the period April 2014 to February 2015 compared to the
previous year.
Q: What further reform measures are you planning in the future?
A: The success of the steps that we have already taken and the positive response of the people
throughout the country to our actions in the first year have encouraged us to do even more. Our
focus will be on P2G2, i.e. Pro-active, Pro-people Good Governance reforms. Another aspect that
we will emphasise and strengthen upon is that the State and the Centre are one team, which has
to work together for reforms to be effective.
Q: You have already opened up a number of sectors for FDI. What are the other areas that you
may consider opening up for FDI in the future?
A: The measures already taken have increased the attractiveness of India as an investment
destination and confidence has improved. Wherever there is high employment potential and
wherever we have strong local talent, for example, in research and development, those will be
the areas of focus for FDI. We have created the National Infrastructure Investment Fund. This is
a major step, which will increase the flow of foreign investments into all infrastructure sectors
without needing separate sector-by-sector approached.
Q: With regard to economic policy, is RBI on the same page as the Finance Ministry? I am
asking this question because there are sometimes remarks by RBI Governor, which indicate
disconnect with the Finance Ministry.
A: I am surprised that an important and credible media agency like PTI is drawing an incorrect
inference based on remarks made in different contexts. RBI has its functional autonomy which
the Government and the Finance Ministry always respect and preserve.
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Q: What growth figure are you targeting this financial year?
A: The experience of the last year and the enthusiasm and encouragement of 1.25
billion Indians give me the confidence that all economic indicators will exceed the
targets. I do not want to undermine the potential and the efforts by giving any
figure which may turn out to be too low.
Q: On Land Acquisition Bill, opposition is saying you want to benefit the
corporates. You have been denying this and saying that the legislation is for the
benefit of the poor farmers and villagers. Still the opposition is unrelenting. Do
you think the resistance by opposition is justified?
A: I don't want to get into political mudslinging. However, I do want to ask whether
those who allotted coal mines and forest land, rich with mineral resources to their
favourite corporates have the moral right to question this government which is
working ceaselessly for the welfare of all sections of society. I am astonished that
even after running a government for 60 years, the ones asking these questions
have such poor knowledge of administration and governance. The whole country
knows that the subject of land is not with the Central Government and the Centre
does not require lands. All rights relating to land are with the states. The 120-yearold Land Acquisition Act was amended by the previous government without even
120 minutes of discussion in Parliament. Thinking the bill was good for farmers,
we also supported it at that time. Later many complaints came from the states. We
cannot disrespect the wishes of states. One should not be so arrogant as to avoid
correcting mistakes, so we brought the bill to rectify the errors that too in
response to the demand of the states. Anyone who looks at our proposed
amendments without politically-tinted glasses will give us full marks.
Q: Since there is a deadlock on the Land Bill, what is the way out? Are you ready to
accommodate the views of the opposition on the Land Bill? Which are the possible
aspects in which the government can agree to opposition views?
A: Gaon, Garib, Kisan; if the suggestions are favourable to these downtrodden
groups and are in the interests of the nation, we will accept those suggestions.
Q: While you have been accused by opposition of being pro-corporate, some in the
industry like Deepak Parekh say nothing is happening on the ground for the
industry. What do you say?
A: The answer is to be found in your question itself. If opponents are accusing us of
being pro-corporate, but the Corporates are saying we are not helping them; then I
take it that our decisions and initiatives are pro-people and in the long term
interests of the nation.
Q: What efforts have you taken to change the way the Government works?
A: We have tried to remind Government servants that they are servants of the public and have
restored discipline in Central Government offices. I have done a small thing; one that appears
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small from outside. I regularly interact with officers over tea; it is part of my working style.
Philosophically, I feel that the country will progress only if we work as teams. The Prime
Minister and the Chief Ministers are one team. The Cabinet Ministers and the State Minister are
another team. The Civil Servants at the Centre and the States are yet another team. This is the
only way we can successfully develop the country. We have taken a number of steps for this and
the abolition of the Planning Commission and its replacement with NITI Aayog in which States
are full partners is a major step in the direction.
Q: There is criticism that all powers are concentrated in the PMO. Is there any merit in such a
view?
A: Your question is loaded. It would have been better if this question had been asked when an
unconstitutional authority was sitting above the constitutional authority and exercising power
over the Prime Minister’s Office. The Prime Minister and the Prime Minister’s Office are very
much part of the constitutional scheme not outside it. We have made major increases in the
delegated powers of individual Ministries, so that many decisions that earlier needed to come to
the Prime Minister and the Cabinet can now be taken by Ministries themselves. The financial
delegation for ministries has been trebled. Devolution to the states has been increased and
states have become full partners in governance through the NITI Aayog. All successful and
transformational administrations need close coordination across different Ministries and there
is nothing unique in it. We have not made any changes in the Business Rules of Government and
decisions are taken by those authorised to take them.
Q: You received a massive mandate from the people who wanted a change from absence of
governance in the final years of UPA II. One year on, there are murmurs that you have not
exactly delivered Achche Din. Are people being impatient?
A: The 21st century should be India’s century, but from 2004 to 2014, bad ideas and bad actions
have affected the country adversely. Every day was a new bad day and there were new scandals.
People were furious. Today, after a year, even our opponents have not accused us of bad actions.
You tell me, if there is not a single scandal. Is this is not Achche Din?
Q: The country is facing an agrarian crisis. The issue of farmer suicides has become a cause of
political slugfest. The Government has taken a number of steps to address the situation faced by
farmers. What more is the Government planning to do?
A: Suicides by farmers has been a serious concern for several years. Political point-scoring
through comparing how many suicides occurred under which government will not solve the
problem. For a government of any party, and for every one of us, even one suicide is worrisome.
I had said in Parliament with great sadness that mudslinging between the ruling and opposition
parties would be unproductive and, respecting the sanctity of Parliament, we need to collectively
find an answer to this issue. We need to find where we have gone wrong and why we are not able
to solve this over so many years. I have asked all parties for their suggestions to bring
contentment and security to our farmers. I want to assure our farmers that this Government will
never be found wanting in doing whatever is needed for their welfare.
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Board likely for proposed infrastructure fund
Business Standard
June 1, 2015
A board of directors could be in the driver's seat at the proposed National Investment
and Infrastructure Fund (NIIF), announced by Finance Minister Arun Jaitley in the
Budget.roposed National Investment and Infrastructure Fund (NIIF), announced by Finance
Minister Arun Jaitley in the Budget.
The board would take decisions on all infrastructure projects and entities in which the fund's
corpus would be invested. However, there are likely to be other parameters.
For example, NIIF will only invest in projects, infrastructure companies or special purpose
vehicles which guarantee a return on investment, according to government sources. The fund is
also unlikely to invest in any public-private partnership (PPP) project.
Sources said the finance ministry had prepared a draft Cabinet note on NIIF, incorporating
these points. The note is being circulated among other ministries for comments and might be
taken up for approval by the Cabinet in a week or two.
"The NIIF might be headed by a chairperson, who will be chosen from the board. The board
itself is likely to consist of senior serving or retired bureaucrats and experts in infrastructure,
project financing and policy from the private sector," a senior government official said, adding
the board might comprise seven or more members. "For welfare projects, there is the budget.
The NIIF will focus on infrastructure initiatives that can generate a return on its investments,"
the person said.
Jaitley had said in his 2015-16 Budget speech, the NIIF will be set up with a corpus of Rs 20,000
crore and the fund will be used to raise debt and, in turn, be invested as equity in infrastructure
finance companies such as Indian Railway Finance Corporation and National Housing Bank.
That has now been expanded to include standalone projects as well.
As reported earlier, the finance ministry is likely to tap the dividend expected from state-owned
companies to the Centre for this purpose.
While Rs 15,000 crore will come from the dividend paid by cash-rich public sector undertakings
(PSUs) such as Oil and Natural Gas Corporation Ltd and Coal India, Rs 5,000 crore will be
infused
by
the
Centre.
The official added, however, that the full corpus of Rs 20,000 crore per financial year might be
utilised from the next year. "This year, we can make do with a corpus of about Rs 10,000 crore,
and then ramp it up," he said.
NIIF is part of the Centre's plans for greater public spending in infrastructure projects to push
growth, at a time when weak earnings have curtailed the private sector's ability to infuse capital
in projects.
By delaying the fiscal consolidation roadmap by a year, and by targeting fiscal deficit of 3.9 per
News
cent of a gross domestic product for 2015-16, instead of 3.6 per cent as per the previous road
map, Jaitley freed up about Rs 70,000 crore for additional investment in key infrastructure
sectors, primarily railway.
The idea was first mooted by Chief Economic Advisor Arvind Subramanian in his mid-year
economic analysis in December during the last financial year.
"It seems imperative to consider the case for reviving public investment as one of the key
engines of growth going forward, not to replace private investment but to revive and
complement it," he had stated in the report. It was taken forward in the Economic Survey and
the Union Budget.
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Infrastructure push from overseas: Companies from friendly nations like
Malaysia and Japan may build highways in India
Economic Times
June 01, 2015
The Narendra Modi administration wants companies belonging to friendly foreign governments
to build India's highways.
The road ministry has sought the finance ministry's permission for a policy that will allow such
investment.
The government has received feelers from public sector undertakings in Malaysia andJapan for
investment in upcoming highway projects. The road ministry would not have to go through the
process of seeking tenders and bids for a highway project under this arrangement, allowing for
faster implementation.
"Exim banks of foreign countries cannot fund their own developers for our highway projects.
But we are hopeful this restriction will be removed to kick start infrastructure development in
the country," a senior official said. The ministry has set itself an ambitious target of awarding
projects to the tune of Rs 3.5 lakh crore in this financial year.
News
The government is planning to launch 1,231 projects that will cover 37,000 km in the next two
years. Having awarded more than five projects under the build operate transfer or BOT toll
mode this year, the government is upbeat about the prospects of public private partnership
(PPP) projects. However, a majority of projects are still dependent on government funding and
are getting awarded through the engineering, procurement and construction ( EPC) route.
Experts agree that governmentto-government (G2G) funding opens up a new route of financing
for the highway sector, which is in dire need of equity infusion. "Government may identify
stretches which may not be viable on PPP but make economic sense for investment from foreign
government agencies," said Vikash Sharda, associate director, infrastructure, PwC India. In
April this year, road ministry officials had visited Malaysia to showcase 20 projects to
the Construction and Industrial Development Board (CIDB).
Malaysian officials are expected to visit India soon to evaluate these projects for investment
internally under the hybrid-annuity model. Under this, 60% of the project cost has to be borne
by the private investor.
The remaining 40% will come from the National Highways Authority of India in five equal
installments. The government will also bear the revenue risk in projects where there is a low
anticipation of traffic flow. Highway projects covering 8,000 km stretch and worth Rs 1 lakh
crore were awarded by the government in FY15. The government will be selling road projects
covering 5,000 km worth about Rs 1 lakh crore after they are completed through theEPC route.
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Govt approves Rs 4318.28 cr DMIC infra projects in Gujarat, Maharashtra
Indian Express
May 31, 2015
News
The government today approved the construction of Rs 4,318.28 crore trunk infrastructure
components like roads, sewage plants in the Dholera Special Investment Region (DSIR) in
Gujarat and Shendra Bidkin Industrial Area (SBIA) in Maharashtra in the Delhi Mumbai
Industrial Corridor (DMIC) project.
The approval was given by the Cabinet Committee on Economic Affairs (CCEA) at its meeting
chaired by Prime Minister Narendra Modi.
The total cost of the DSIR would be Rs 2,784.83 crore and Rs 1,533.45 crore for SBIA. The total
cost of the trunk infrastructure project would be invested by the DMIC trust as equity in the
city/node special project vehicle (SPV).
Trunk Infrastructure development is proposed to commence in FY 2015-16 for the infrastructure
projects and is likely to be completed by FY 2018-19 after all necessary approvals.
The primary objective of developing the activation area is to trigger developmental activities in
DSIR and attract local and global investments.
This activation area has been selected due to maximum concentration of government land which
will facilitate the early take off of various infrastructure components in DSIR, an official
statement said.
The land for the project will be contributed by the State Government as their equity while the
contribution of DMIC Trust by way of equity and debt will be made in form of cash for
implementing various trunk infrastructure components subject to a ceiling of Rs 3000 crores.
DSIR has been planned over an extensive area of land measuring approximately 920 sq km
encompassing 22 villages of Dhandhuka and Barwala Taluka in the Ahmedabad District.
This node is strategically located near the industrial cities of Vadodara, Ahmedabad, Rajkot,
Surat and Bhavnagar urban agglomerations.
DMICDC, with the support and partnership of the Government of Gujarat, plans to create an
economically and socially balanced new-age city with world class infrastructure and high
quality-of-life standards and sustainability in the urban form.
The Centre is developing the Delhi Mumbai Industrial Corridor (DMIC) Project, as a global
manufacturing and investment destination, by utilising the high capacity 1483 kilometer long
Western Dedicated Freight Corridor (DFC), as the backbone.
In essence, DMIC project is aimed at the development of futuristic Indian cities in India, which
can compete with the best manufacturing and investment destinations in the world.
The DMIC project is being implemented jointly by the Centre and the respective State
Governments.
News
Eight investment areas/industrial regions have been identified for development in the first
phase of DMIC, across six states namely Gujarat, Haryana, Madhya Pradesh, Maharashtra,
Rajasthan and Uttar Pradesh.
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Gujarat to get one lakh new houses in five years, govt to announce redevelopment
plans
Firstpost.com
June 01, 2015
The Gujarat government is all set to announce a 'redevelopment policy' to initiate building of
affordable houses in place of old colonies, a senior official said in Ahmedabad on Monday.
The plan is to build 1 lakh affordable houses in cities like Ahmedabad, Rajkot, Vadodara and
Surat, Urban Development and Urban Housing (UDD) Secretary Mona Khandhar said.
According to her, the policy is ready and will be announced "very soon". Representational image.
ReutersRepresentational image. Reuters "We have already prepared the final policy draft and it
will be announced very soon. This is the first time in Gujarat where a redevelopment policy will
be launched," she said.
The policy primarily aims to build new houses in place of old and dilapidated houses built
around 15 to 25 years ago in major cities, by the Gujarat Housing Board (GHB), which is the
state's nodal agency for construction of affordable houses.
"We want to provide new and improved houses to those living in houses which show signs of
aging and are in a dilapidated condition. Apart from being bigger in size, these new houses
would also have several amenities like better parking space," she said, adding these new houses
would be built on the same land on which old housing colonies stand.
"The biggest benefit to occupants is that they will get bigger houses. Our aim is to build 1 lakh
new houses in five years. These 1 lakh houses also include many old houses which will be
replaced with new ones," she said.
"In addition, we will be able to add new apartments by constructing multistoreyed buildings on
the same land where buildings with very less floors were built earlier. Through this initiative,
optimal use of available land would be achieved," she said.
Since the policy's focus is on building new houses in place of existing ones in urban centres, the
state government has made provisions to incentivise occupants of these houses, who may have
to bear some financial burden to get new homes.
"Our aim is not profit, but to provide better homes. Though current house owners may have to
shell out some money to get new homes in place of old ones, we will definitely incentivise them
to make sure that they don't feel too much financial burden," she said.
Giving more insights into the policy, a senior GHB official said that lack of maintenance over the
years have left many houses in a dilapidated condition.
News
"So far, GHB has built around 1.76 lakh houses in the state. Most of them are more than 15 years
to 25 years old now. Moreover, the carpet area of these houses are also small because of then
prevalent Floor Space Index (FSI) limitations," the official said.
"This low FSI forced us to build low-rise buildings back then due to which the majority of these
colonies have three to four floors only. Now we aim for optimal utilisation of land by building
multistoryed buildings" the official said.
He said that when these colonies were built several years ago, land prices were not high.
Presently, land prices are as high as Rs 1 lakh per square yard in posh areas, where many old
colonies are situated.
"FSI limitations have been eased, paving the way to build some more floors. Thus, we can build
multistoryed buildings in the same place, which will give us extra number of apartments at no
extra cost. Simultaneously, present occupants will get bigger homes with better amenities," the
official said.
He said that it is likely that private builders would be roped in under the Public Private
Partnership (PPP) model along the lines of the Gujarat government's affordable housing policy
launched in 2014.
"Our aim is to build houses without incurring extra cost. We will invite private builders and
developers to join this mission under the PPP model. We will give them a specific quota of
houses which they can sell in the open market," Khandar said.
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