Mukherjee allocates Rs.2,14,000 crore for infrastructure sector

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New Delhi, Feb 28 (ANI): Union Finance Minister Pranab Mukherjee on Monday proposed an allocation of Rs.2,14,000 crore for infrastructure sector, which is 23.3 percent higher than the current year.

This amounts to 48.5 percent of the Gross Budgetary support to plan expenditure.

Announcing the General Budget 2011-12 in the Lok Sabha today, Mukherjee stated that in order to give a boost to infrastructure development in railways, ports, housing and highways development, it has been proposed to allow tax-free bonds of Rs.30, 000 crore to be issued by various government undertakings in the year 2011-12.

This includes Indian Railway Finance Corporation Rs.10, 000 crore; National Highway Authority of India Rs.10, 000 crore; HUDCO Rs.5000 crore and Ports Rs.5000 crore.

Mukherjee informed that India Infrastructure Finance Company Limited (IIFCL) is expected to achieve a cumulative disbursement of Rs.25, 000 crore by March 31, 2012.

Under the “take out financing scheme”, seven projects have been sanctioned with a debt of Rs.1500 crore. Another Rs.5000 crore will be sanctioned during 2011-12, he informed.

Highlights of the Union BUDGET 2011-12 are as follows:

GROWTH, INFLATION EXPECTATIONS

* Economy expected to grow at 9 percent in 2012, plus or minus 0.25 percent

* Inflation seen lower in the financial year 2011-12

SPENDING

* Plan expenditure seen at 4.41 trillion rupees in 2011-12, up 18.3 percent

REVENUE

* Gross tax receipts seen at 9.32 trillion rupees in 2011-12

* Non-tax revenue seen at 1.25 trillion rupees in 2011-12

DISINVESTMENT

* Disinvestment in 2011-12 seen at 400 billion rupees

POLICY REFORMS

* To create infrastructure debt funds

* To boost infrastructure development with tax-free bonds of 300 billion rupees

* Food security bill to be introduced this year

* To permit Securities and Exchange Board of India (SEBI) registered mutual funds to access subscriptions from foreign investments

* Raised foreign institutional investor limit in 5-year corporate bonds for investment in infrastructure by $20 billion

* Public debt bill to be introduced in parliament soon

SECTOR SPENDING

* To allocate more than 1.64 trillion rupees to defence sector in 2011-12

* Corpus of rural infrastructure development fund raised to 180 billion rupees in 2011-12

* To provide 201.5 billion rupees capital infusion in state-run banks in 2011-12

* To allocate 520.5 billion rupees for the education sector

* To raise health sector allocation to 267.6 billion rupees

AGRICULTURE

* Removal of supply bottlenecks in the food sector will be in focus in 2011-12

* To raise target of credit flow to agriculture sector to 4.75 trillion rupees

* Gives 3 percent interest subsidy to farmers in 2011-12

* Cold storage chains to be given infrastructure status

* Capitalisation of National Bank for Agriculture and Rural Development (NABARD) of 30 billion rupees in a phased manner

* To provide 3 billion rupees for 60,000 hectares under palm oil plantation

* Actively considering new fertiliser policy for urea

FINANCE MINISTER ON THE STATE OF THE ECONOMY

* “Fiscal consolidation has been impressive. This year has also seen significant progress in those critical institutional reforms that will pave the way for double digit growth in the near future.”

* Food inflation remains a concern

* Current account deficit situation poses some concern

* Must ensure that private investment is sustained

* “The economy has shown remarkable resilience.”

FINANCE MINISTER ON GOVERNANCE

* “Certain events in the past few months may have created an impression of drift in governance and a gap in public accountability … such an impression is misplaced.”

* Corruption is a problem, must fight it collectively

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