Clean Cess Doubled Clean cess on coal has been doubled to ` 200 per

tonne to raise ` 13,118 crore in 2015-16. This highlights Indias commitment to tackle climate change ahead of the UN conference on climate

change in Paris later this year. The impact on tariffs is not much, estimated to be about 6

paise per unit. Budget provides for raising the cess to ` 300 per tonne before March 2016. Customs duty on high-grade coal has been

slashed to 10% from 55%.

COAL

BUDGET AT A GLANCE

Rolling in Big FundsThe Budget sharply increases the outlays for roads and railways. Outlays on roads have been raised by ` 14,031 crore and budgetary support to railways has been

increased by ` 10,050 crore to boost transportation. It also allows tax-free

infrastructure bonds for railway and road projects and has sanctioned 1,00,000 km of

new roads in addition to an equal number of roads under construction to link 1,78,000 unconnected habitations. Excise duty on

petrol and diesel to the extent of ` 4 per litre has been converted to road cess to fund

investment in this sector.

ROADS & RAIL

PORTS

Five Giant Projects Govt to invite bids for five new ultra mega power projects worth ` 1 lakh crore with acquired land, coal supply and all approvals in place. This will rule out delays on account of clearances and attract Indian and foreign investors. It also announced that off-grid solar plants and other sources will help electrify the remaining 20,000 unlit villages by 2020. Anomaly related to depreciation of power plants has been removed, helping companies charge unaccounted depreciation in the next financial year.

POWER

ANGELA MERKEL DISCOVERING A NEW ANGELA IN EUROPE The godmother of Europe is waiting. Waiting for your visit, German Chancellor Angela Merkel tweeted to PM Modi late last year. In two months, her wait will be over. Hanover will host the worlds largest industrial fair in April that will be jointly inaugurated by the new M&M: Modi and Merkel. As Europe totters, Merkel can bank on a muscular India for trade & markets.

Himangshu.Watts@timesgroup.com

Infrastructure development is poised to take a gi-ant leap as the Budget promises rapid construc-tion of highways, ports, ultra mega power plants, airports and renewable energy projects with the help of massive public funding made possible by

delaying fiscal belt-tightening.Analysts expect foreign direct investment, which has

been lukewarm towards Indian infra-structure, to flow into the sector. The optimism stems from the belief that the promised transparent auction and ab-sence of uncertainty over clearances will calm overseas investors, who of-ten say it is difficult to compete with local firms that are adept at navigating bottlenecks and roadblocks.

With projects worth `8.7 lakh crore stalled due to difficulties in clear-ances, litigation, poor performance of contractors or financial difficulties, Finance Minister Arun Jaitley said the major slippage in the past decade has been on the infrastructure front. There is a pressing need to increase public investment.with private investment in in-frastructure via the public-private partnership (PPP) model still weak, public investment needs to step in, to catalyse investment, he said.

The minister focused on steps to fund infrastructure and rule out delays and corruption steps which ana-lysts said can lure foreign companies to invest in Indian projects. A key initiative is the plug-and-play model, in which projects will be offered after securing all clearances. Jaitley said he expects ` 1 lakh crore invest-ment in five ultra mega power projects (UMPP). India Ratings said domestic companies may not participate

enthusiastically in these projects due to weak lending and equity sentiment in the sector. However, this could boost the foreign interest in the sector which will bring in the required equity and more technological inputs for timely implementation and enable efficient opera-tion of these projects, the agency said.

Shubhranshu Patnaik, senior director with Deloitte, said land acquisition for giant projects may be an issue. Committing to bid out five UMPPs is creditable but it isnt clear how soon this can be done, given the need to acquire land for the plant and mines, he said. The Budget proposals include a massive expansion and ac-celeration of road-building by completing 1 lakh km of

highways already under construction and another 1 lakh km of new projects, which will boost demand for inputs, including cement and steel.

Jaitley also promised tax-free bonds for various infrastructure projects and the setting up of the National Investment and Infrastructure Fund, which will have an annual flow of ` 20,000 crore to it. This will enable the trust to raise debt and, in turn, invest as equity, in infrastruc-ture finance companies such as IRFC and NHB. These companies can then leverage this extra equity, manifold, Jaitley said. Further, PSUs will raise capital expenditure by ` 80,444 crore to

`3,17,889 crore in 2015-16. In fact, all told, investment in infrastructure will go up by ` 70,000 crore in 2015-16, over 2014-15 from Centres funds and resources of CPSEs (central public sector enterprises), the minis-ter said. Jaitley also said the government plans to in-troduce a Public Contracts (Resolution of Disputes) Bill to resolve disputes, which have delayed many projects.

Analysts and industry executives said that the steps announced in the Budget will boost infrastructure investment and improve business sentiment, even as they added that they will keenly watch how effectively the promised measures are implemented.

Absence of Tax Holiday Sends Infra Scrips into a TizzyShares of most infrastructure compa-nies fell on Saturday despite the Budgets focus on the sector. Traders

felt the policies were not exciting enough to attract private investment as many were ex-

pecting a tax holiday. Shares of GMR, GVK, JP Associates, Tata Power, Reliance Power and Lanco Infra fell between 0.4% and 4.5% while that of Reliance Infrastructure closed 2.7% up. L&T shares rose 0.5%.

Sarita Singh & Karnika Bahuguna

New Delhi: The Union Budget has proposed a plug-and-play model for big-ticket infrastructure projects such as power plants, airports and roads, where all regulatory clear-ances will be put in place before they are awarded to private developers through a transparent auction.Finance Minister Arun Jaitley, dur-ing his Budget speech on Saturday, announced plans to set up five ultra-mega power projects (UMPPs) of 4,000 mw each under the plug-and-play model. This means winners of the contract can start implementing the project immediately, without worrying about all the regulatory clearances and coal or gas linkages the biggest causes for so many stalled projects in the country.This should unlock investments to the extent of `1 lakh crore, Jaitley said, adding that the government will consider plug-and-play model for other projects such as roads, ports, rail lines and airports as well.Industry players said the move is in line with long-term industry demand and will help the government attract foreign and domestic investments into much-needed infrastructure projects as it will significantly cut down project implementation time and cost and time overruns.The plug-and-play model is one of the most important announcements made by the government. It impress-es upon the bureaucracy a huge bur-

den to do the homework before bid-ding out the projects, said Vinayak Chatterjee, chairman, Feedback Infra. He pointed out that setting up an infrastructure project at present requires a minimum 70 statutory clearances from central and state au-thorities. Eliminating such proc-esses would send positive signals to Indian and global investors across all sectors, he said. This is also good for the people of India as there will be

better price discovery with healthy competition and the projects will come up on time, eliminating extra costs, Chatterjee added.Arvind Mahajan, head of infrastruc-ture at KPMG, said the key for the model lies in implementation. The government has to spend a fair amount of time to do feasibility stud-ies and the preparation required to incubate before it puts out the bids for private sector, Mahajan said.

Plug-and-Play Model Strikes the Right Notes

POWER PUNCH Plan to auction 5 UMPPs with clearances & linkagesIN FOCUS

India is one of the worlds fastest-growing economies. However, it operates far be-low its potential. Over the past few years, investments have slowed and there is an urgent need to revive the economy.

I believe the first full Budget of the new government is the right enabler to achieve growth. Special focus on infrastructure, both social and physical, would have sig-nificant benefit for our nation.

It is heartening to note that the govern-ment is willing to walk the talk through higher public investments. Higher public investments will be a catalyst for higher private investments and support a swift recovery, as private spending is key to long-run growth.

Manufacturing is a key policy objective of the new government, which identifies this sector as the engine of long-run growth.

To this end, Budget 2015 has announced a series of cuts in customs and excise duties. This has the potential to promote domes-tic manufacturing and Make in India for creation of more jobs.

Even as we embark on a high economic growth trajectory, our special emphasis should be on social infrastructure to bring the marginalised and poor sections of soci-ety into the mainstream. This is because 21.9% of our population is living below the poverty line. We are in the bottom 25% of all countries on the Human Development Index, and bottom 20% on the Gender Inequality Index.

Women account for nearly 48% of Indias population. Thus, focus on wom-en should be a priority for any budget. The vision of each house in the country having clean drinking water and a toi-let by 2022 is commendable. There is a very close interdependence between water, sanitation, health, nutrition, and human well-being. We view water as a central resource for a sustainable India

and are in the process of playing a very trans-formational role. We are successfully executing a crucial pilot in the state of Rajasthan and working together with the government and the community to improve water access and avail-ability, and as a result transform lives of rural communities.

India is one of the worlds youngest nations and it is blessed with a demographic dividend. It is impor-tant for us to harness this immense poten-tial. Thus, it is heartening to see that the government will soon launch a National Skills Mission. It is a step in the right di-

rection and numerous initiatives on skill development will help improve employ-ability and generate greater employment opportunities.

Numerous social security measures, par-ticularly the universal social security sys-tem, announced in Budget 2015 will have far-reaching benefits for all Indians and poorer sections of society.

To conclude, the new government has pursued pro-growth initiatives and I be-lieve Budget 2015 will continue the impe-tus to further boost economic growth and re-establish investor confidence.

The government is well positioned for a swift and efficient execution of pro-growth initiatives. Not only will this help bring in more capital and employment, it will sig-nificantly benefit society at large and help achieve aspirations of millions of Indians.

New Delhi: The government has promised to bear a major part of the risk of public-pri-vate-partnership projects to revive the PPP model and at-tract much-needed private investment in the infrastruc-ture sector.The PPP mode of infrastruc-ture development has to be revisited and revitalised, Finance Minister Arun Jaitley said in his Budget speech on Saturday. The ma-jor issue involved is rebalanc-ing of risk. In infrastructure projects, the sovereign will have to bear a major part of the risk without, of course, absorbing it entirely, he said.Many projects under the PPP model have failed, leading to complaints from the private sector that companies bear brunt of the setback while the government is not under pressure to help resolve diffi-culties of a stranded project. Improving the PPP model and introducing plug-and-play model are widely seen as attractive options to chan-nelise more private funds for infrastructure.

Govt Willing to Walk the Talk Through Higher Public Investments

Govt to Bear Major Part of Risk in PPP

Budget 2015 is the right enabler to achieve growth

ANIL AGARWALGROUP CHAIRMAN,

VEDANTA RESOURCES

by Invite

Smarter Ports to Dock HerePorts in public sector to be encouraged to corporatise and become companies under the Companies Act. This could help ports introduce efficiency in operations including autonomy in tariff fixation. Budget says major ports should utilise their huge land resources. Analysts say this could facilitate airport-type concessions. Real estate monetisation could boost revenue for major ports. There are 12 major ports in India. Port unions have opposed privatisation and threatened indefinite stir from March 9.

MODIS IMPRINTz Govt-led push in infrastructurez Plug-and-play model eases business

THECONTEXTHit By The Downturn

501 Projects taken

up for resolu-tion by PMG

205 Projects:all issues resolved

24.9

7.25

STILL A BIG PIPELINE OF STUCK PROJECTS

Amount In ` Lakh Crore

ONCE BUOYANT ROAD SECTOR STRUGGLING

Target (Km) Achieved

2011-122012-132013-142014-15*(TILL OCTOBER)

501357324260 1984*

5824618763306300

PVT INVESTMENT IN INFRA HAS SLOWEDInvestment In $ Million

2009

2010

2011

2012

2013

37,229

71,967

40,916

33,140

13,519SOURCE: World Bank

GOVT HAS BEEN UNABLE TO STEP UP SPENDING

2010-11 2015-16 (BE)Plan Expenditure, In ` Crore

Transport

Energy

Rural devlp.

Communication

Irrigation & ood control

61692

42060

10389

621

476

86143

12549

3110

5051

772

Checking the Right Boxes

Budget 2015 Rebooting IndiaIMPACT ON INFRASTRUCTURE

Adding Muscle to the CoreFIRING ON ALL CYLINDERS Budget promises rapid construction of roads, ports, UMPPs, airports & green energy projects with the help of massive public funding while weeding out delays and corruption

Imag

ing:

Ari

ndam

Social secu-rity measures, particularly the universal social security system, an-nounced in Budget 2015 will have far-reaching ben-efits for all Indians

Stalled projects at the end of Dec 14

`8.8 lakh cr or 7% of GDPSECTORSElectricity, Highways, Airports, Construction, Coal, Iron, Steel, Cement, Drugs, Garments, Processed Food

REASONS FOR DELAY Environ-ment, land, fuel clearances, lack of demand, funds

A GIANT LEAP FOR INFRASTRUCTURENew Roads Planned

1 lakh kmCapex of PSUs

`3.2 lakh crRise in Govt Spending

`70,000 crInfrastructure Fund

`20,000 cr

4 THE ECONOMIC TIMES | NEW DELHISUNDAY | 1 MARCH 2015