Budget 2020 India: To augment infrastructure, the government has announced an accelerated highway development programme that will include 9,000 km of economic corridor and 2,500 km of access-controlled highways.
By Umesh Revankar
Budget 2020 India: Finance minister Nirmala Sitharaman, in the Union Budget 2020, has made a host of announcements geared towards strengthening the country’s infrastructure and encouraging the flow of credit in the financial markets.
To augment infrastructure, the government has announced an accelerated highway development programme that will include 9,000 km of economic corridor and 2,500 km of access-controlled highways. Besides, 2,000 km each of coastal roads and strategic highways will also be constructed.
Additionally, the finance minister said that the Delhi-Mumbai expressway will be completed in three years. This would be in addition to two more express highway projects while work is also expected to start on the Chennai project.
Overall, the government has targeted the monetisation of 12 lots of highway bundles by 2024 and has also indicated the need to commercialise highways for NHAI to raise funds.
The FM also announced a Budget allocation of Rs 30,000 crore for the development of Jammu and Kashmir and another Rs 5,000 crore for Ladakh. Any commitment, in terms of funding and timelines, bodes well not only for the sector but for the economy as a whole.
We believe that the unveiling of the National Logistics Policy will definitely give an impetus to trade in the country. The FM has managed the tenuous balance between boosting rural and urban infrastructure with grace.
On the financial sector side, one of the key announcements that the government has made is the raising of insurance cover for depositors from the current Rs 1 lakh to Rs 5 lakh. In light of the recent developments in the banking sector, such an announcement is a testament to the government’s commitment towards creating a clean, reliable and robust financial sector.
In a similar vein and for the same purpose, the finance minister also announced that the contracts act will be strengthened to ensure that all contracts are honoured. Overall, measures were announced in the Union Budget 2020 to address both, the demand side and supply side issues, of the credit markets.
For the latter, the government has introduced a 16-point action plan to double farmers’ income. On the supply side, gave a shot in the arm to the NBFC sector by reducing the eligibility limit for the SARFAESI Act from an AUM of Rs 500 crore to an AUM of Rs 100 crore and by reducing the minimum threshold for loan size under this scheme to Rs 50 lakh.
Additionally, an enhancement in the partial credit guarantee scheme for NBFCs is likely to give further impetus to the sector.
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An intent to boost consumption through the introduction of the new tax regime was also evident in the Union Budget. By making the adoption of the new slabs optional, the government has shown great sagacity.
Additionally, measures like the introduction of cold storage chains for perishable goods, viability gap funding for creation of efficient warehouses through the PPP mode, SHG-run vVillage storage scheme and integration of e-NWR with e-NAM should make the rural infrastructure robust.
And commitments to revisit the chinks in the GST implementation show that the government is focused towards de-clogging the system and operating with simplicity.
Overall, we think that this is a balanced Budget that is a step in the right direction.
The writer is MD & CEO, Shriram Transport Finance