New Delhi: Concerned over poor investment by private sector in big-ticket infrastructure projects, the Niti Aayog has recommended to the government to hike private investment in sectors like roads, railways and shipping, and promote job creation in the Union Budget. To this end, there is a strong likelihood of finance minister Arun Jaitley announcing creation of at least one coastal economic zone (CEZ), either along the eastern or western coast, in the forthcoming Union Budget.
The Niti Aayog during its recent deliberations with the PMO, according to sources privy to the development, is learnt to have suggested that heavy investments are required in infrastructure sector projects, and to achieve this objective, it has recommended investment in railways to the tune of 1.1 per cent of the GDP — at par with the aviation sector. Currently, the investment in the railway sector is currently 0.8 per cent of the total GDP. Improving quality of road and rail projects is another suggestion which has been given by the government think tank to the Centre.
Also considering the fact that compared to the electronics exports market value of China, which stands at a mammoth $900 billion, India has a measly $10 billion, the Niti Aayog has strongly pushed for the announcement of at least one CEZ in the Budget.
Sources said Mr Jaitley will announce creation of one CEZ in his budget speech on February 1. Electronics, leather and textile are some of the key areas on which the Niti Aayog is learnt to have suggested the Centre to keep its focus during the Budget preparations.
Creation of CEZs is the brainchild of Niti Aayog vice-chairman Arvind Panagariya, who has held high level discussions with the PMO regarding announcing the creation of one CEZ in the Budget.
The concept of a CEZ is based on Shanghai model, where export-oriented manufacturing units could be developed, making it into a hub of production of goods made exclusively in India.
Sources informed this newspaper that in order to realise the true potential of NDA government’s “Make In India” campaign and promote India as a major manufacturing hub, these CEZs could play a significant role.
Though currently at a preliminary stage of planning, as discussions between coastal states and the Centre are taking place on the modalities of such CEZs, sources added that in order to incentives manufacturers to set up their units, exemptions could be removed on targeted areas of production.
