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Budget push for infrastructure

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CIOL Bureau
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NEW DELHI: This year's Union Budget has paid attention to one of the frequent clamoring demands made by India Inc.- that of infrastructure. And the FM did not disappoint.

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The emphasis is on different kinds of infrastructure-roads, power, improvement of ports and airports, highways and roads.

“There is an investment boom in the country and it is necessary to maintain the confidence of investors. It appears that India is catching up with the high investment rates of East Asia and China. In every sector, the attempt is to promote more investment,” said P Chidambaram in his Budget speech.

Realizing the boom created by IT and ITES sector, the Government proposes to sustain the growth of the industry by using the existing vehicles of viability gap funding and the India Infrastructure Finance Company Limited (IIFCL) to create a window to provide equity participation and/or viability gap funding to new ventures. This window will be open for three years in order to accelerate investment.

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The finance minister echoed the views of state governments like Karnataka and Andhra Pradesh, which are proposing the setting up of industrial townships for IT. Chidambaram said that Government would actively promote the establishment of new towns, preferably focussed on a specific industry, for example Information Technology, or a specific theme, for example education or health.

With regard to power generation, 82 projects are now under construction and, when completed in one to three years, will add 33,000 MW of capacity in the public sector and 6,500 MW of capacity in the private sector.

Chidambaram said that he proposed to provide a grant of Rs.4,595 crore towards Metro projects in Mumbai, Bangalore, Maharashtra, Madhya Pradesh and Gujarat.

The Government has also decided to develop 1,000 kms of access-controlled Expressways. The sections that have been identified are Vadodara-Mumbai, Delhi-Chandigarh, Delhi-Jaipur, Delhi-Meerut, Delhi-Agra, Bangalore-Chennai and Kolkata-Dhanbad. The budget has also made allocations for development of ports and airports.

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