India Budget Highlights 2014-2015: Transport

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In his speech, Mr. Jaitley states that “a country of the size of India must have a transport network which can ensure faster travel across cities which are geographically distant. This will also improve the supply chain in transporting goods across cities. We will initiate work on select expressways in parallel to the development of the Industrial Corridors.”

Driving growth in manufacturing, urbanisation, and smart cities, industrial corridors will be further developed:

  • “The Amritsar-Kolkata Industrial master planning will be completed expeditiously for the establishment of industrial smart cities in seven States of India.
  • The master planning of three new smart cities in the Chennai-Bengaluru Industrial Corridor region, viz., Ponneri in Tamil Nadu, Krishnapatnam in Andhra Pradesh and Tumkur in Karnataka will also be completed.
  • The perspective plan for the Bengaluru Mumbai Economic corridor (BMEC) and Vizag-Chennai corridor would be completed with the provision for 20 new industrial clusters.”

The budget addressed numerous facets of transport, from urban transportation such as Urban Metro Projects, to Industrial Corridors.

Roads:

The roads sector constitutes a very import artery of communication in the country, and needs a “huge amount of investment along with debottlenecking from maze of clearances.” The budget proposed an investment in National Highways Authority of India and State Roads – a substantial amount in the disconnected North-East States of India. During the current financial year, a target of National Highway construction of 8500 km is expected to be achieved.

  • Construction of 8,500 kilometers of National Highways, backed by a further infusion of ₹ 37,880 crores (€4.45 Billion) in National Highway Authority of India (“NHAI”) and State Roads.
  • Initiate work on select expressways in parallel to the development of the Industrial Corridors.
  • Pradhan Mantri Gram Sadak Yojana to receive ₹ 14,389 crores (€1.69 Billion) to enhance access for rural population.
  • Outlay of ₹ 50 crores (€5.88 Million) for pilot testing a scheme on “Safety for Women on Public Road Transport”.
  • Mentioned the “need to develop more nuanced and sophisticated models of contracting and develop quick dispute redressal mechanisms. An institution to provide support to mainstreaming PPPs called 3P India will be set up”.

Automotive:

  • There was no announcement regarding the allocation of funds for the National Electric Mobility Mission Plan in the Budget 2014 (Ref: NDTV).
  • Proposed the implementation of the Goods and Service Tax (GST).

Rail:

Urban Metro Projects have proven to be very useful in decongesting large cities. Mr. Jaitley stated that the Government encourages “the development of metro rail systems, including light rail systems, in the PPP mode, which will be supported by the Central Government through Viability Gap Funding (VGF). In the current financial year, I propose to set aside a sum of ₹ 100 crore (€11.76 Million) for Metro Projects in Lucknow and Ahmedabad.”

  • Encourage development of Urban Metro Projects under PPP mode, supported by Central Government through VGF.
  • To set aside a sum of ₹ 1,000 crore (€117.6 Million) to improve rail connectivity with North Eastern Region.
  • Key proposals in the Rail Budget include – Diamond Quadrilateral project of high speed trains to connect all major metros; high speed bullet train proposed on Mumbai-Ahmedabad route; and dedicated freight corridor proposed on Eastern and Western corridors. (BMR)

Ports and Shipping:

The development of ports is acknowledged as “critical for boosting trade” and “sixteen new port projects are proposed to be awarded this year with a focus on port connectivity.”

The development of inland waterways can improve the capacity for the transportation of goods. “A project on the river Ganga called ‘Jal Marg Vikas’ (National Waterways-I) will be developed between Allahabad and Haldia to cover a distance of 1620 kms, which will enable commercial navigation of at least 1500 tonne vessels.”

  • Proposal to formulate a comprehensive policy for promotion of Indian ship building industry.
  • Sixteen new port projects proposed to be awarded during the current financial year to boost trade and enhancing port connectivity.
  • Project on river Ganga proposed to develop National Waterways-I.
  • ₹ 11,635 crore (€1.37 Billion) will be allocated for the development of Outer Harbour Project in Tuticorin for phase I.
  • SEZs will be developed in Kandla and JNPT.

The provision of services rules are to be amended, and tax incidence to be reduced on the transport of goods through coastal vessels to promote Indian Shipping industry.

Aviation:

As air travel is still out of reach for a large number of aspirational Indians, a scheme for the development of new airports in Tier I and Tier II cities will be launched. The facility of Electronic Travel Authorization (e-Visa) is to be introduced in a phased manner at nine airports in India.


Sources:
• Arun Jaitley’s budget speech transcript 
• NDTV News - 2014 Union Budget, what it holds for Indian automobile industry 


 

Additional information