The government is in the process of kick-starting the infrastructure sector by increasing public spending, creating new avenues for raising capital for infrastructure projects and ensuring more transparent processes.
It seems committed to addressing the key challenges that have long been faced by international and domestic investors. The Budget could include some important measures to improve the environment for private infrastructure investment.
The government might focus on the 'One Team' model for infrastructure that recognises the importance of both the Central government and state governments for infrastructure investments.
This year's Budget could also spell out the roadmap to achieve some of the government's bigger agendas such as GST, 'Power for All' and 'Housing for All'. The Budget could also focus on creation of the National Investment Infrastructure Fund with an initial annual allocation of Rs 40,000 crore.
It is expected to fund public sector infrastructure finance companies, which, in turn, might be able to leverage their higher credit rating to access domestic and international debt markets. This should help the sector attract money from foreign pension funds, insurance funds and other institutional investors seeking more secure investments.The fund is expected to get higher annual allocations in future years.
Strengthening Policy and Governance:
Written by Ravi Gopalakrishnan, Head of Equities, Canara Robeco Asset Management Co.
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