Sri Narendra Modi government has been giving utmost priority to improve infrastructural facility in all sectors as parts of its prime objective of to ensure rapid economic growth by bringing out the country from the economic mess created by erstwhile UPA government. Even the earlier NDA government led by Shri A B Vajpayee has given a boost to infrastructure particularly in the areas of national highways and telecom sectors. It is clear that it is impossible to mobilize budgetary resources for massive infrastructural development, mainly in the following sectors.
1. Railways
2. National Highways
3. Civil Aviation
4. Power generation
5. Shipping
Realizing the resource constrains for the government, both the Railway Minister Sri Sadananda Gowda and Finance Minister Sri Arun Jaitley have proposed to mobilize resource for such massive projects in their annual budgets presented to the Parliament primarily from the following avenues.
1. Foreign Direct Investment (FDI)
2. Public-Private-Partnership (PPP)
3. Private entrepreneurs/ Corporate
Already we have been witnessing positive response from these sectors particularly due to confidence they are cultivating over able leadership of our Prime Minister Sri Narendra Modi and his determination to strengthen our economic foundation. However, unregulated partnership of private/foreign investments are likely to pave way for exploiting situation for their favour with active collusion of some weaken links in the system. UPA regime’s worst performance in this regard is before us in the form of unprecedented large scale scams. To avoid any such possibility, we suggest creating a separate Regulatory Authority for Infrastructure. Already we have been witnessing successful functioning of such regulatory in the areas of Telecom, insurance and banking sectors. The following regulatory authorities have been helping us for constant monitoring of private partners by making them to follow necessary regulations. The following are major regulatory agencies presently before us :
1. Reserve Bank of India – Banking Sector
2. SEBI – Stock Market
3. TRAI – Telecom sector
4. IRDA – Insurance sector
In the same lines, we suggest to create Infrastructure Regulatory Authority and bring all five crucial infrastructural sectors like Railways, National Highways, Civil Aviation, Power Generation and Shipping under the purview of this Authority. This Authority will be entrusted the task of processing and monitoring the projects and guidelines for mobilizing the funds required through public/private/foreign investors in these sectors. It may be observed in this regard, we have been prices of telecom charges went down substantially after entering of private partners, mostly due to continuous monitoring by TRAI. This experience makes us to realities the need for affective regulating mechanism in infrastructure sectors also. Creation of such an authority will ensure transparency, accountability and speedy process, besides generate confidence among people.
Tax Exemption
In this regard, there is also a need for separate exemption for investment in infrastructure bonds to the extent of Rs.1 Lakh in Income tax. Also there can be an encouragement for investment in infrastructure bonds of unused, idle money, conversion of idle assets for infrastructure activities. People will not invest unless Government assurance is available. The act will serve dual purpose of converting the idle assets as productive assets and funds requirement of infrastructure activities will be fulfilled. This will also enable general public participation in a big way in completion of various infrastructure projects.
The above said are my personal view for kind consideration.
(CA.K.HANMANDLOO)
