ICRA comments on Union Budget – Roads & Ports sector

Mr. Ankit Patel, Vice President & Co-Head, Corporate Ratings, ICRA Limited on Union Budget Impact on Ports and Shipping

The government’s plan to award 7 projects via Public Private Partnership (PPP) route at Major Ports worth Rs 2000 crore in FY2021-22 is likely to increase the involvement of private players in O&M services at the major ports. Further, a new scheme will be rolled out to promote flagging of merchant ships in India by providing subsidy support to Indian shipping companies in global tenders floated by Ministries and CPSEs. For this Rs. 1624 crore will be provided over 5 years and should enable companies to enhance their global share. 

Mr. Rajeshwar Burla, Vice President, Corporate Ratings, ICRA Ltd on Union Budget Impact on Road sector

Massive increase in capital outlay bodes well for road sector

FY 2022 remains a crucial year for two reasons: a) the importance of Government spending on infrastructure to revive the economy and b) the significant catch up required in the ongoing Bharatmala and allied programmes. In this backdrop, the massive increase in the budgetary allocation towards capital spend for ministry of road transportation and highways by 32% to Rs. 1,08,230 crore in BE FY2022 bodes well for the road sector. Including the IEBR (market borrowings) and asset monetisation proceeds for NHAI, the total capital outlay increased by 35% to Rs. 1,98,230 crore in BE FY 2022 from Rs. 1,46, 975 crore for BE FY2021.