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Budget 2020: Expect govt dues to be cleared; roads & highways to remain priority sectors, says former NHAI Chairman

infrastructure | Jan 22, 2020 11:16 AM IST

Budget 2020: Expect govt dues to be cleared; roads & highways to remain priority sectors, says former NHAI Chairman

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Roads, highways, irrigation should be the priority sectors and one can look at least 10 percent extra for them in the budget, said Brijeshwar Singh, former chairman, NHAI.

With the Union Budget to be presented just a few days from now, the focus is on key sectors that figure prominently in the budget math both as contributor and as an expense pocket - sectors like infrastructure, oil and gas.

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Brijeshwar Singh, former chairman, NHAI sharing his outlook on infrastructure sector, as well as his expectations from budget 2020 said. "We have to look at the pipeline which has been announced for the infrastructure sector. Within the pipeline we have got everything - power, highways to rural roads and within that, I suspect the finance minister (FM) would like to give a much higher allocation to the labour intensive part of infrastructure. So, one can expect more spends on highways, on rural roads and even on waterways and irrigation projects, while expectations are low for spending on telecom and power, which are not very labour intensive portions of the infrastructure,” he said, adding that one is was not sure if railways would get an enhanced allocation because the government is trying to consolidate its reforms on railway board first.
Therefore, roads, highways, irrigation should be the priority sectors and one can look at least 10 percent extra for them and probably even more than that,” he added.
“Land acquisition, which has been a big problem in the past but we probably had an inflection point there and so, by and large it is in a much better situation,” said Singh in an interview with CNBC-TV18, adding that when the government is willing to pay three times more to acquire land, the acquisition of land would not be a problem.
“I think the FM has announced a drive to clear government dues, to release money, which is pending. That hasn’t gone as far as income tax refunds, which are still delayed but yes government dues will be cleared and I hope to see constructive progamme in the budget. Once that happens then the balancesheet and the financial strength of the small and midcap companies or these non-listed companies which do the bulk of your construction that will improve and then you start getting response on the award side," he said. Without that happening, it will be a difficult situation for awards. You need a turnaround in those balancesheets and those corporate earnings and you need liquidity there,” he noted.
When asked about the ambitious Bharatmala project and allied highway project, if there could be an increase in the budgetary allocation for that,  Singh said, “There is an overall budgetary constrain, there is a shortage of revenue, tax revenues have not met with expectations, there is currently a fear of inflation. The government might not be able to provide all the funds projected in both Bharatmala and SagarMala within that time frame of 2022. This could spill over to 2025 but work will go on," he said.
The budgetary allocation is currently estimated at around Rs 3.43 lakh crore over FY19-FY22.
According to him, the critical factor is not NHAI’s capacity to get the projects ready, to get the land acquisition through at the moment but it is to pay off arbitration awards, do the conciliation, get some liquidity back into the sector and then you will get a better market response.
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