Keeping in mind the existing macroeconomic realities, I feel the finance minister has presented a well-calibrated Budget. Union Budget 2013-14 has been a sincere attempt to restart the growth engine while trying to maintain fiscal rectitude to the maximum possible extent.
It is heartening to note that infrastructure development has figured prominently in finance minister P Chidambaram?s speech. The initiatives to provide support to infrastructure debt funds (IDFs) are commendable, especially as the banks are constrained and unable to increase their exposure to infrastructure projects. I hope the IDFs will be able to mobilise resources from a diverse cross-section of investors with the government?s active participation.
There are several other positives for the infrastructure sector. Enhanced corpus for MGNREGS, PMGSY, RIDF and Indira Awas Yojana, along with increased funds for Nabard, so that refinancing can be extended to projects pertaining to warehousing, cold storage, etc, will go a long way in addressing the supply bottlenecks that have been fueling food inflation.
The decision to announce 3,000 km of new road projects in next six months, the proposal to build two new ports (in West Bengal and Andhra Pradesh), one harbour in Tamil Nadu, dredging of national waterways and the proposal to create a grid (combining ports, inland waterways and roadways) augur well for the infrastructure sector. The work on three industrial corridors is also something to cheer.
I am especially excited about the proposal to step up domestic coal production by forming PPPs with Coal India. Also, states have been encouraged to submit their discom restructuring plans to the power ministry and avail benefits of the scheme.
As regards the oil and gas sector, the proposed move to move from a profit-sharing to revenue-sharing arrangement in terms of shale gas production is also a step in the right direction.
The National Housing Bank has been provided additional funds to promote rural housing through refinancing and has also been instructed to set up an urban housing fund. Further, additional tax incentives for the first-time home buyer is also a good move. I feel all these steps will play an important role in stimulating internal demand that will help in pushing the economy to a higher growth path.