CIRC supports the budgetary proposals on infrastructure development

New Delhi, July 06, 2009

“Various proposals in this year’s budget targeting regulation and financing of infrastructure sector are timely steps,” said Mr. Pradeep Mehta of the CUTS Institute for Regulation & Competition (CIRC) while reacting to the annual budget presented in the Parliament today. “Though the agenda for regulatory reforms including leveraging quality of regulation will take some time but the initiation of such steps provides an important direction,” he added.

It is noteworthy that this budget has placed a critical emphasis on infrastructure to achieve its inclusive growth agenda. The budget provides for a 23 percent increment in allocation to the National Highways Authority of India for the National Highway Development Programme. Addressing the crucial need for better urban infrastructure, allocation under the Jawaharlal Nehru National Urban Renewal Mission has been stepped up by 87 percent. It proposes key steps including takeout financing scheme, refinance up to 60 percent of commercial bank loans for public-private partnership projects in critical sectors to infrastructure sector.

With regard to housing sector, enhancement in allocation for housing and provision of a huge amount for basic amenities to urban poor is certainly one of the many pro-people proposals. Increased allocations in schemes such as Bharat Nirman, Pradhan Mantri Gram Sadak Yojana and Rajiv Gandhi Grameen Vidyutikaran Yojana are clearly aimed at achieving inclusive growth.

Power, being a key sector, has been long neglected and this budget lays added allocation under the Accelerated Power Development and Reform Programme. Indicating the strategic significance of availability and cost of power to national competitiveness, Mehta says: “the key is timely implementation of projects which is linked to better functioning of the existing regulatory framework and its reforms.”

A key feature of this Budget is that significant allotments have been made towards improving the delivery of public services. “Under Mr. Nandan Nilekani’s leadership, the Unique Identification Authority of India will be able to create online data base with identity and biometric details of Indian residents and provide enrolment and verification services across country successfully,” Mehta added.

The message from the budget this year is loud and clear: infrastructure development is critical to achieve inclusive growth. With a better and functioning regulatory framework India can certainly witness more infrastructure investment to achieve the target of nine percent of gross domestic product as investment in infrastructure as mentioned in this budget.

CIRC is an independent body which has been set up in Delhi to provide research-based capacity building solutions to infrastructure regulation, among other issues. Dr. C. Rangarajan, MP is the President of this Institute.

For further details, please contact:
Navneet Sharma, Deputy Director, CIRC, +9192127 23123
Bipul Chatterjee, Director, CIRC, +9198719 95921

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