Central-Plan
Photo: Illustration only/Wikimedia Commons
Finance Minister Arun Jaitley
Arun Jaitley
Finance Minister

In line with the focus on emerging infrastructure deficit, the biggest rail infrastructure managing departmentally-run enterprise, Indian Railways, would take the top place among central enterprises in terms of plan capital expenditure during 2015-16, overtaking the traditional high capex spenders, petroleum and power sectors.

Helped by a sharp 32 per cent hike in budgetary support and a sharper 70 per cent rise in bonds and debentures, the Railways would spend 54 per cent more on plan capex during the year. Railways has been a major claimant of the central government’s plan budgetary support and helped also by a decent feat in raising internal and external resources, it is generally maintaining a good record in meeting plan capex targets.

Roads and bridges, another major emerging capex hungry infrastructure but a heavily public exchequer funded segment, has taken second place in central plan capex plans for 2015-16, made possible by over 14-fold increase expected in external sources, particularly, bonds and debentures, and 51 per cent in budget support. In his budget presented on February 28, Finance Minister Arun Jaitley has proposed to allow tax-free bonds in railways, roadways and irrigation sectors to help raise massive debt capital.

Petroleum sector would be the third largest plan project spender during the year, and the power sector the fourth in central plan outlay for 2015-16. Plan capex in power companies would go up by 15 per cent, whereas the same in petroleum companies by just around 4 per cent. Due to cross subsidy etc., which has cramped internal resource generation and not-so-encouraging near future prospects, the plan capex in the sector during the next year would be less by around 30 per cent, as compared to a record outlay of over Rs.1 trillion in 2013-14.

Other infrastructure sectors
Among the other infrastructure sectors, the plan outlay for civil aviation and telecom services and renewable energy would be lower and that of coal and lignite would stagnate at year-ago level (BE/RE). Urban development, mainly metro rail and urban rejuvenation mission, would increase its capex by 12 per cent and housing (mainly HUDCO) 31 per cent.

Overall, plan capex on infrastructure projects, which was around 70 per cent of total Central Plan outlay of Rs.4.27 trillion during 2014-15, would increase by 35 per cent during 2015-16 (BE/RE), while the capex on other sectors would rise 37 per cent. This includes Rs.20,000 crore central plan assistance in 2015-16 to states for newly introduced special assistance by specific interventions through National Institution for Transforming India (NITI) Aayog, and around Rs.13,100-13,200 crore for iron and steel industries and northeastern region. It may, however, be noted that RE is usually less than BE, or budget expectations, for the year. Thus, total infrastructure spend during 2014-15 (RE) was 9 per cent below BE, whereas total central outlay (RE) fell 11 per cent short of BE for the year.

Total infrastructure spending through central plan, including budget support and IEBR of PSUs, would be around 2.8 per cent GDPmp, against 2.4 per cent during 2014-15. Among the individual infrastructure sector public sector undertakings, apart from the giant Indian Railways which would spend plan capex of Rs.98,365 crore, Oil and Natural Gas Corporation Ltd would be spending Rs.36,249 crore (+4 per cent), ONGC Videsh Ltd Rs.10,402 crore (-16 per cent), NTPC Ltd Rs.23,000 crore (+3 per cent), Power Grid Corporation India Ltd Rs.20,000 crore (same), National Highways Authority of India Rs.42,694 crore (+18 per cent), HUDCO Rs.15,133 crore (+27 per cent), and Indian Oil Corporation Ltd Rs.10,409 crore (+11 per cent).

By the way, infrastructure spend in the central plan, mostly capital expenditure, is incurred predominantly through PSUs, which generate huge internal resources and raise external funds through bonds/debentures, ECB, equity issues etc. Thus, meeting plan spending target is critically dependent on resource generating/raising ability of PSUs. Central exchequer is expected to meet 29 per cent of total infrastructure capex, whereas IEBR of concerned PSUs is envisaged to fund 71 per cent of the plan outlay.

Some specific inclusive projects
* Digital India (Rs.2,510 crore)
* Din Dayal Upadhyaya Gram Jyoti Yojna (Rs.4,230 crore)
* PMGSY (Rs.4,134 crore0
* Namami Gange (Rs.2,100 crore)
* Rural and Remote telephony (Rs.2,400 crore)
* Swachh Bharat Abhiyan (Rs.3,625 crore)
* Smart Cities (Rs.6,000 crore)
* Equity Investment in Metro Rail (Rs.8,385 crore)
* Delhi-Mumbai Industrial Corridor (Rs.1,200 crore)

CENTRAL PLAN OUTLAY ON INFRASTRUCTURE SECTORS (Rs.CRORE)
 
2013-14 
2014-15 (BE)
2014-15 (RE)
2015-16 (BE)
Railways
52,006
63,949
64,302
98,365
Roads & Bridges
39,612
38,214
31,037
85,182
Petroleum
106,560
77,600
72,736
75,385
Power
64,951
70,297
64,044
73,993
Housing
25,202
15,626
12,541
16,441
Urban Development
9,548
12,481
10,719
12,015
Coal & Lignite
7,380
9,831
9,575
9,632
New and Renewable Energy
3,497
8,547
8,522
8,332
Telecommunication Services
13,183
5,941
10,209
6,890
Civil Aviation
8,117
9,474
8,300
5,361
Other Communication Services
2,632
6,348
2,541
4,720
Ports and Lighthouses
3,650
2,864
2,428
2,593
Atomic Energy Industries
654
1,737
949
1,467
Shipping
356
1,369
13
1,136
Other Transport Services
90
150
85
573
Postal Services
394
720
277
422
Medium Irrigation
207
1,124
584
340
Water Supply and Sanitation
11,956
231
158
231
Inland Water Transport
129
182
77
207
Minor Irrigation
89
381
154
179
Flood Control and Drainage
146
293
158
153
Major Irrigation
0
0
0
100
Total infrastructure sectors
350,357
327,357
299,410
403,717
Total for other sectors
253,217
157,175
127,401
174,665
Total for all sectors
603,573
484,532
426,811
578,382

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