Lok Sabha Question No. 2443 (UNSTARRED), answered on 2016-08-01
Subject: Promotion of Infrastructure Sector
Ministry: COMMERCE AND INDUSTRY
Asked by: PONGULETI SRINIVASA REDDY, BHOLA SINGH, ANURAG SINGH THAKUR

## GOVERNMENT OF INDIA MINISTRY OF COMMERCE & INDUSTRY

## DEPARTMENT OF INDUSTRIAL POLICY & PROMOTION

## LOK SABHA

UNSTARRED QUESTION NO. 2443. TO BE ANSWERED ON MONDAY, THE 1 ST  AUGUST, 2016.

## PROMOTION OF INFRASTRUCTURE SECTOR

## 2443.  SHRI PONGULETI SRINIVASA REDDY:

SHRI BHOLA SINGH:

SHRI ANURAG SINGH THAKUR:

Will the Minister of COMMERCE AND INDUSTRY be pleased to state:

## वाणिज् यवव द्यग ं ्री

- (a) whether the Government is aware that growth of the infrastructure sectors is declining at an alarming rate;
- (b) if so, the details thereof and the reasons therefor;
- (c) the details of the measures taken by Government to revamp Public-Private Partnership on infrastructure development with reference to Kelkar Committee recommendations, if so, the details thereof; and
- (d) the other steps taken by the Government to revive the growth of infrastructure sector and progress made so far in this regard?

## ANSWER

वाणिज् यवव द्यग ााज् यं ्रीस् वतं ््रभााा(स्रींतंरीिरंमलााीरीतंाांि( THE MINISTER OF STATE (INDEPENDENT CHARGE) OF THE MINISTRY OF COMMERCE & INDUSTRY (SHRIMATI NIRMALA SITHARAMAN)

- (a) &  (b): The  detail  of  the  growth  rate  of  Infrastructure  sectors  during  last  two  years  is given in the table below:

## Table: Growth Rate of Infrastructure Sector

| Sector                                       | 2014-15   | 2015-16   |
|----------------------------------------------|-----------|-----------|
| Power(BU)                                    | 8.8       | 5.7       |
| Coal(MT)                                     | 7.7       | 4.7       |
| Steel (Finished) (MT)                        | 5.3       | -1.9      |
| Cement(MT)                                   | 5.8       | 4.5       |
| Fertilizers(MT)                              | 1.1       | 9.0       |
| Petroleum                                    |           |           |
| (i) Crude Oil (MT)                           | -0.9      | -1.4      |
| (ii) Refinery (MT)                           | 0.3       | 3.5       |
| (iii) Natural Gas(MCM)                       | -4.9      | -4.1      |
| Roads (Widening & Strengthening of Highways) |           |           |
| (i) NHAI (KM)                                | -21.0     | 32.4      |
| (ii) State PWD & BRO (KM)                    | -10.6     | 11.0      |
| Railway Revenue Earning Freight Traffic      | 4.1       | 0.6       |
| Shipping & Ports                             |           |           |
| (i) Cargo Handled at Major Ports (MT)        | 4.6       | 4.3       |

| (ii) Coal handled at Major Ports (MT)                       | 13.2   | 10.3   |
|-------------------------------------------------------------|--------|--------|
| Civil Aviation                                              |        |        |
| (i) Export Cargo Handled (Tonnes)                           | 6.6    | 5.9    |
| (ii) Import Cargo Handled (Tonnes)                          | 7.3    | 9.9    |
| (iii) Passengers Handled at International Terminals (Lakhs) | 7.9    | 7.6    |
| (iv) Passengers Handled at Domestic Terminals(Lakhs)        | 13.8   | 20.9   |

Source: MoSPI

MT: Million Tonnes; BU: Billion Units; MCM: Million Cubic Meter; KM:  Kilometer

The reasons for the slowdown in some of these sectors in recent past are, interalia, moderation in domestic demand, slowdown in economies of other parts of the world and sector specific issues.

- (c): Since  infrastructure  contracts  are  long  term,  they  are  sometimes  subject  to uncertainties  inherent  in  long  term  partnerships.    Few  constraints  identified  by Government  include  over  leveraged  balance  sheets  of  the  developers,  global macro-economic  developments,  land  acquisition  issues,  environmental/forest clearances  and  lack  of  dispute  resolution  mechanism.    The  same  has  been pointed  out  by  the  'Committee  on  Revisiting  and  Revitalising  PPP  Model  in Infrastructure' headed by Dr. Vijay Kelkar in their Report submitted to Government  in      November,  2015.  The  recommendations  of  the  Committee (available in public domain on URL http://finmin.nic.in/reports/ReportRevisitingRevitalisingPPPModel.pdf.) include, inter-alia, steps to be taken by all stakeholders including  public authorities, state and  regulatory  authorities,  corporate  sector,  private  developers,  development contractors  and      financial  institutions.  These  also  include  constant  capacity building by each group of stakeholder. While government has taken measures on its part, steps need to be taken by the other parties.
- (d): Government has taken various steps to boost investments in infrastructure sector which includes launching of innovative financial vehicles such as  Infrastructure Debt Funds (IDFs), Real Estate Investment Trusts (REITs)/Infrastructure Investment Trust (InVITs), National Infrastructure Investment Fund (NIIF), laying down a framework for municipal bonds, issuance of Tax Free Bonds, allowing complete pass through of income tax to securitization trusts  including  trusts of Asset  Reconstruction  Companies  (ARCs),   bringing  in 5/25  Scheme to  extend long  tenor  loans  to  infrastructure  projects,  take-out  finance,  flexible  structuring and  refinancing  of  project  loans,  higher  credit  exposure  limits  for  single  and group borrowers, and single  NBFC/NBFC-Asset  Financing  Company  and Infrastructure Financing Company, amendment in investment norms of insurance companies, Employees' Provident Funds, etc.

Apart  from  this,  the  Government  has  taken  steps  to  boost  the  industrial production and growth. These inter-alia, include Startup India initiative as well as 'Make in India' programme under which 25 thrust sectors to provide a major push to  manufacturing  in  India  have  been  identified.  The  steps  have  been  taken  to create  ease  of  doing  business,  including  setting  up  of  an  Investor  Facilitation Cell, launch of e-biz Portal and liberalising policy for industrial license for defence industries. The Foreign Direct Investment (FDI) policy and procedures have been simplified and liberalised progressively. For creation of state-of-art infrastructure, Government is implementing Delhi Mumbai Industrial Corridor (DMIC) project. In addition, a number of other industrial corridor projects have been conceptualized.