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To stimulate public investment in infrastructure, we had set up India Infrastructure Finance Company Ltd (IIFCL) as a special purpose vehicle for providing long-term financial assistance to infrastructure projects. We will ensure that IIFCL is given greater flexibility to aggressively fulfil its mandate.

‘Takeout financing’ is an accepted international practice of releasing long-term funds for financing infrastructure projects. It can be used to effectively address the asset liability mismatch of commercial banks arising out of financing infrastructure projects and also to free up capital for financing new projects. IIFCL would, in consultation with banks, evolve a ‘takeout financing’ scheme which could facilitate incremental lending to the infrastructure sector.

The Government has had some success in attracting private investment in a wide range of infrastructure sectors such as telecommunications, power generation, airports, ports, roads and even in railways through public-private partnerships (PPP). To ensure that infrastructure projects do not face financing difficulties arising from the current downturn, as I indicated in my Interim Budget speech, the Government has decided that IIFCL will refinance 60 per cent of commercial bank loans for PPP projects in critical sectors over the next fifteen to eighteen months. IIFCL and banks are now in a position to support projects involving a total investment of Rs 100 thousand crore in infrastructure. Combined with the steps we are taking to increase public investment in infrastructure, this will provide a big boost to such investment.

The allocation during the current year to National Highways Authority of India (NHAI) for the National Highways Development Programme (NHDP) is being stepped up by 23 per cent over the 2008-09 (BE).

I have also increased the allocation for the Railways from Rs 10,800 crore made in the Interim Budget for 2009-10 to Rs 15,800 crore.

The Jawaharlal Nehru National Urban Renewal Mission (JNNURM) has been an important instrument for refocusing the attention of the State governments on the importance of urban infrastructure. In recognition of the role of JNNURM, the allocation for this scheme is being stepped up by 87 per cent to Rs 12,887 crore in the current Budget.

To improve the lot of the urban poor, I propose to enhance the allocation for housing and provision of basic amenities to urban poor to Rs 3,973 crore in the current year’s Budget. This includes the provision for Rajiv Awas Yojana (RAY), a new scheme announced in the address of the President of India. This scheme, the parameters of which are being worked out, is intended to make the country slum free in the five year period. To address the problem of flooding in Mumbai, Brihan Mumbai Storm Water Drainage Project was initiated in 2007. The entire estimated cost of the project at Rs 1,200 crore is being funded through Central assistance. A sum of Rs 500 crore has been released for this project up to2008-09. I have enhanced the provision for this project from Rs 200 crore in Interim BE to Rs 500 crore to expedite the completion of the project.

The Accelerated Power Development and Reform Programme (APDRP) is an important scheme for reducing the gap between power demand and supply. I propose to increase the allocation for this scheme to Rs 2,080 crore, a steep increase of 160 per cent above the allocation in the BE of 2008-09.

With the recent find of natural gas in the KG Basin on the Eastern offshore of the country, the indigenous production of Natural Gas is set to double with natural gas emerging as an important source of energy. LNG infrastructure in the country is also being expanded. The Government proposes to develop a blueprint for long distance gas highways leading to a National Gas Grid. This would facilitate transportation of gas across the length and breadth of the country.

The Assam Gas Cracker Project sanctioned in April 2006 is being executed at a cost of Rs 5,461 crore. The capital subsidy of Rs 2,138 crore for the project is to be provided by the Central Government. The outlay for this project is being stepped up suitably.

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