Fresh capitalisation of Rs 70,000 crore in public sector banks came as a pleasant surprise and is highly positive for the banking ecosystem. It will go a long way in getting lending back on track to stimulate growth in core sectors like infrastructure.
Finance Minister Nirmala Sitharaman's speech highlighted key milestones achieved under Bharatmala scheme and rural road connectivity initiatives, which is commendable.
The government's renewed push to encourage innovative roll-out models in road sector like Hybrid Annuity Model (HAM), TOT (Toll Operate Transfer) and modified build-operate-transfer (BOT) is well thought through and is in line with mobilising alternative financing through an effective asset monetisation strategy.
New initiatives to fund the Dedicated Freight Corridor and urban transportation projects on PPP model, affordable housing projects and commitment of fresh investment in Electric Vehicles (FAME II) demonstrates the government priority in the right areas aligned to sustainable and impact development within the infrastructure sector.
"One nation one grid" would mean impetus for a national level water and gas grid. This would effectively mean also containing the inefficiencies and loses in the power distribution and water sectors.
Infrastructure Credit enhancement initiative is a fresh move, which has been under contemplation for sometime, but is very relevant from a timing perspective. However, I would closely watch out for its scoping and overall envisaged roll out model since we have seen other models like take-out financing, meeting with limited success.
The Finance Minister's emphasis on infrastructure debt funds (IDFs), deepening of bond market and consolidation of relationships with global pension and sovereign funds to meet the long term investment requirements in infrastructure sector is a welcome move and should mean more potential traction and leverage through National Investment and Infrastructure Fund (NIIF).
(Sandeep Upadhyay is MD & CEO, Centrum Infrastructure Advisory Ltd. The views expressed are personal)
( With inputs from IANS )