Union Budget 2018: Expectations in infrastructure
The 2017 Budget proposed a specific mechanism to streamline institutional arrangements for resolution of disputes in public utility contracts, construction contracts and PPP.
Setting up of PPP project review committee and the infrastructure PPP adjudication tribunal for re-negotiating the concessions: The 2017 Budget proposed a specific mechanism to streamline institutional arrangements for resolution of disputes in public utility contracts, construction contracts and PPP. The 2018 Budget should provide more clarity on its implementation as this will be a major overhaul given that many projects are mired in legal and financial disputes.
Single Window Clearance: Several departmental clearances can be circumscribed to a single window thereby reducing the operational hurdles for completion of projects. While some sectors have successfully witnessed this transition a more uniform approach towards all infrastructure sectors would be a welcome sign.
Digitization of revenue records: A policy for e-mutation of revenue documents is important as the industry has been expressing dismay over the poor maintenance of physical revenue records. This move will fast track the land acquisition process and bring transparency in title search of the land documents, revenue records and pave way for title insurance that has long been mooted in India.
Funding: To improve long term funding availability for the infrastructure sector, higher allocation towards National Investment and Infrastructure Fund (NIIF) may be announced. Furthermore, given the exposure of the banking sector in stressed assets, proposed new schemes on bond issuances to ease some pressure on the banking sector would provide some relief. Government may also consider introducing new guidelines to state governments to provide an additional state support over and above the viability gap funding currently offered to make investments in the sector more viable.
Other expectations: In addition to the above, we expect - (a) an increased focus towards the interminable land acquisition faced by infrastructure projects, (b) incentives for clean technologies and enabling regulatory framework to allow development of associated infrastructure, and (c) augmentation of dedicated funding for projects like Sagar Mala, Smart.
Shivanshu Thaplyal, Associate Partner and Harshita Khurana, Associate at Khaitan & Co