Initiatives under Infrastructure and Investment

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Overview:

The Central Government listed 7 priorities – called ‘Saptarishi’ in Budget 2023- inclusive development, Last mile delivery, Infrastructure and Investment, Green growth, Youth power, Unleashing potential, and Financial inclusion.

Key Initiatives under Infrastructure and Investment:

Support to State Governments for Capital Investment:

  • Last year, the Government of India launched a Scheme Special Assistance to States for Capital Investment for 2022-23.
  • Under this Scheme, financial assistance is provided to the State Governments in the form of a 50-year interest-free loan for capital investment projects.
  • The loan provided under the scheme will be over and above the normal borrowing ceiling allowed to the States.
  • Budget 2023: The scheme will be continued for one more year with a significantly enhanced outlay of ` 1.3 lakh crore.

Infrastructure Finance Secretariat:

  • The newly established Infrastructure Finance Secretariat will assist all stakeholders for more private investment in infrastructure, including railways, roads, urban infrastructure, and power, which are predominantly dependent on public resources.

Harmonized Master List of Infrastructure:

  • What is it? It acts as a guide to all agencies involved in the field of infrastructural development and financing in the country.
  • The list is updated by a committee, chaired by Secretary, Department of Economic Affairs, consisting of chief economic adviser, representative from Niti Aayog, Department of Revenue, and other key government agencies. 
  • Budget 2023: It will be reviewed by an expert committee for recommending the classification and financing framework.

Making Cities ready for Municipal Bonds:

  • What is a  Municipal Bond? It is a debt instrument issued by municipal corporations or associated bodies in India.
  • The funds raised are used to finance socio-economic development projects.
  • It was first issued in 1997 by Bangalore local body for infrastructure development projects.
  • Municipal bonds are exempted from tax provided the buyer adheres to the rules laid by the municipal corporations. The interest is also exempted from taxes.
  • Budget 2023: Cities will be incentivized to improve their credit worthiness for municipal bonds.f India launched a Scheme Special Assistance to States for Capital Investment for 2022-23.
  • Under this Scheme, financial assistance is provided to the State Governments in the form of a 50-year interest-free loan for capital investment projects.

 Urban Infrastructure Development Fund( UIDF): 

  • A UIDF will be established through the use of priority sector lending shortfall.
  • Purpose: The fund will be used by public agencies to create urban infrastructure in tier-2 and tier-3 cities.
  • It will be managed by the National Housing Bank.
  • It will be established on the lines of the Rural Infrastructure Development Fund (RIDF).
  • States will be encouraged to leverage resources from the grants of the 15th Finance Commission, as well as existing schemes, to adopt appropriate user charges while accessing the UIDF.

Urban Sanitation:

  • All cities and towns will be enabled for 100 percent mechanical desludging of septic tanks and sewers to transition from manhole to machine-hole mode.
  • Enhanced focus will be provided for the scientific management of dry and wet waste.

 


Q1)  What is Rural Infrastructure Development Fund (RIDF)?

The RIDF was set up by the Government in 1995-96 for financing ongoing rural Infrastructure projects. The Fund is maintained by the National Bank for Agriculture and Rural Development (NABARD).

SourceUnion Budget 2023: Here Are "Saptarshi" - The 7 Priorities Of Union Budget