Budget 2022: Government decision to fund capital outlay for NH projects largely through budgetary support positive

-

The government relaxed the fiscal deficit targets to meet the huge funding requirements for productive asset creation, without which achieving targets under both the Bharatmala and the National Infrastructure Pipeline (NIP) would have been challenging.

NIP involves an outlay of around Rs 20.3 trillion in the road sector over FY2020-FY2025 and is expected to play a significant role in asset creation. Of the total outlay under NIP, the central government’s contribution stands at Rs 13.8 trillion with the balance of Rs 6.5 trillion to be contributed by the state governments. However, budgetary allocations have lagged behind and not kept pace with the funding requirement of these plans.

The central government has allocated a total of Rs 4.9 trillion between FY2020 and FY2022 (36 percent of the total outlay). Of this, Rs 2.9 trillion is provided as gross budgetary support by the central government while the balance of Rs 2.0 trillion was funded by raising debt at NHAI. Consequently, the total debt of NHAI increased to more than Rs 3.3 trillion by March 31, 2021, from Rs 1.8 trillion as of March 31, 2019.

Given the rising debt levels at NHAI, the GoI decided to fund the capital outlay for national highway projects largely through budgetary support in FY2023. Therefore, NHAI is unlikely to borrow incrementally in FY2023. To plug this, the budgetary allocations for the Ministry of Road Transportation and Highways have increased sharply by 73 percent to Rs 1.87 trillion in BEFY2023 from Rs 1.08 trillion in BEFY2022 and 55 percent higher than REFY2022 of Rs 1.21 trillion.

However, including the IEBR (market borrowings) and asset monetisation proceeds for the NHAI, the total capital outlay increased marginally by 4.8 percent to Rs. 2.08 trillion in BEFY2023 as against Rs 1.98 trillion in BEFY2022 but 1.7 percent lower than REFY2022 of Rs 2.11 trillion.

The total indicative value of the National Monetisation Pipeline (NMP) for the core assets of the central government has been estimated at Rs 6.0 trillion over the four-year period with roads accounting for Rs 1.6 trillion. NHAI has been monetising public-funded highway projects since 2018. In the current year, it had raised over Rs 50 billion through its maiden Infrastructure Investment Trust (InvIT) in November 2021, and another Rs 22.6 billion from toll-operate-transfer (TOT) awards. Budget envisaged asset monetisation of Rs 200 billion in FY2023 which can be comfortably met given the strong appetite for road assets.

The allocations to the PMGSY increased by 27 percent to Rs 190 billion in BEFY2023 from Rs 150 billion in BEFY2022 which is expected to support the order book addition of small and mid-sized construction contractors. Further, provisions related to payment of 75 percent of running bills mandatorily within 10 days will improve the working capital cycle of contractors.

The author is Assistant Vice President, Sector Head, ICRA Limited. Views are personal.

Read all the Latest News, Trending News, Cricket News, Bollywood News,
India News and Entertainment News here. Follow us on Facebook, Twitter and Instagram.



from Firstpost India Latest News https://ift.tt/jtP5Unv
Vinay Kumar G

Comments

Post a Comment

Popular posts from this blog

Both COVID-19 vaccine doses needed for good protection against B16172 variant

-
It’s been a concerning few weeks in the UK, with the B16172 variant first taking hold and then spreading to become dominant. This more infectious form of the virus, initially identified in India, is what we’re now going to have to live with – unless it is out-competed by another variant in the future. Worryingly, experts had predicted that B16172 might be able to escape some of the effects of vaccines, which if true would threaten to derail the UK’s plans to finish lifting restrictions from the end of June. However, Public Health England (PHE) has looked at the ability of various variants to evade immunity and says that the UK’s vaccines remain effective against the variants circulating, including B16172. On the surface, this looks like good news. But delve a bit deeper, and things get more complicated, says Paul Hunter, professor of medicine at the University of East Anglia. PHE’s research found a little drop-off in protection against B16172 among people who were fully vaccinated.
Read more

New coronavirus variant emerge in India: How should our COVID response change?

-
Image
After genome sequencing of over 10,000 COVID-19 cases in India, researchers have discovered a new variant with two new mutations which may be better at evading the immune system. In 15-20 percent of samples from the Indian state of Maharashtra (the state accounting for 62 percent of cases in the country) a new, double mutation in key areas of the virus has been detected. These are now known as the E484Q and L452R mutations. What makes the variant different? Both these mutations are concerning because they are located in a key portion of the virus – the spike protein – that it uses to penetrate human cells. Spike proteins attach via a “receptor binding domain”, meaning the virus can attach to receptors in our cells. These new mutations include changes to the spike protein that make it a “better fit” for human cells. This means the virus can gain entry more easily and multiply faster. Given what we have seen with other similar mutations , it might also make it harder for our immu
Read more

120 flights delayed, 30 trains running late; Delhi fog & cold wave continue to give shiver to travellers

-
Arrival and departure of 120 flights, both domestic and international, to Delhi airport were affected due to dense fog and cold wave conditions on Wednesday, according to Delhi Airport FIDS (Flight Information Display System). As per the Delhi Airport FIDS, a total of 53 flights, including 21 domestic arrivals, 16 domestic departures, 13 international departures and three international arrivals scheduled are cancelled and not operating due to fog and other operational reasons from and to Indira Gandhi International (IGI) Airport in the national capital on 17 January. #WATCH | Delhi: Several flight operations delayed at IGI airport due to low visibility amid fog. pic.twitter.com/hG1DUKllEt — ANI (@ANI) January 17, 2024 Visuals from the Delhi airport showed passengers waiting outside, checking update of their scheduled flights. There were also some people waiting for flight of their families, friends and loved ones to arrive, which got delayed due to fog. #WATCH | Delhi | Pas
Read more