Expect 10% Rise In Power Sector Allocation: CARE Ratings

The government is due to present an interim budget on February 1. That would mark the last budget before general election due by May. Business leaders, analysts and investors will study the budget announcements carefully for any announcements related to different sectors. Listing its expectations from the Budget with respect to various sectors, credit ratings agency CARE has said it expects the government's allocation to infrastructure sector to be similar to Budget 2018's overall allocation of approximately Rs 6 lakh crore.

The agency has said that it expects additional special packages for dedicated segments of infrastructure projects for timely completion. "A one-time package for completion of long-stuck projects from the National Highways Development Project (NHDP)...would be an enabling step, helping both developers as well as help in completion of long-pending projects," CARE Ratings said in its note dated January 18.

Bharatmala Pariyojana is a centrally-sponsored project that focuses on optimising efficiency of road traffic movement across the country by bridging critical infrastructure gaps.

"This package should be in-addition to the outlay for Ministry of Roads Highways and Transport (MoRTH)," the ratings agency added.

CARE Ratings further said that it expects the allocation to the road sector in line with the Railways and coal sectors. That includes a special package for the coal sector for development of railway infrastructure around coalmines, and a technology upgrade scheme especially for the freight division of the Railways, it noted.

CARE also said it expects the allocation for the power sector to be increased by an additional 10 per cent for infrastructure augmentation of grid and distribution.

The bulk of the allocation is expected towards the roads and highways, Railways and power sectors, CARE Ratings further said.

The ratings agency has said that the government's fiscal situation for 2018-19 has been an area of concern with revenue not keeping up with targets, with the gross fiscal deficit having breached the whole year target in the first eight months itself.

Against this backdrop, the government's budget presentation would be closely watched for insights into the state of finances of the Union government, and its estimates for income and expenditure for financial year 2019-20.