Budget 2021 : Transport

  • Development Finance Institution:
    • A new development finance institution is being set up to fund infrastructure projects under the National Infrastructure Pipeline.
    • It will help meet the infrastructure’s long term debt financing needs.
    • The goal is to have a lending portfolio of at least Rs. 5 lakh crore in three years.
  • Highways: The Ministry of Road Transport and Highways has received Rs. 1,18,101 crore in the Union Budget, of which Rs. 1,08,230 crore is for capital expenditure making it the highest-ever outlay for the sector.
  • Railways: The budget has proposed a “record” allocation of Rs. 1.1 lakh crore for Indian Railways.
  • A new scheme for augmentation of city bus services.
  • New Metro networks announced.
  • The increased allocations would go towards the completion of vital infrastructure projects, capacity-building passenger amenities and safety enhancement.
  • The proposals will act as a major boost to urban transport. The proposals will work towards raising the share of public transport in urban areas.
  • This will help reduce congestion in urban areas and lead to better life quality for urban commuters. It will also help reduce air pollution due to vehicular emissions.
Development Finance Institution Analysis:
  • In Budget 2021-22, Development Finance Institution (DFI) has been announced with the following specifications.
    • Capital base = Rs 20,000 crore
    • Lending target = Rs 5 lakh crore in three years.
  • Aim : The proposed DFI will be used to finance social and economic infrastructure projects identified under the National Infrastructure Pipeline (NIP).
  • Challenges: The earlier generation of DFIs ran into the problem of financing. The retail deposit access was cornered by commercial banks and the availability of long-term financing without government guarantees was limited.
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