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Budget 2016: India allocates Rs 800 crore for ports sector

In his last budget, Jaitley had said ports in public sector will be encouraged, to corporatize, and become companies under the Companies Act.

, ET Bureau|
Updated: Feb 29, 2016, 07.46 PM IST
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In his last budget, Jaitley had said ports in public sector will be encouraged, to corporatize, and become companies under the Companies Act.
In his last budget, Jaitley had said ports in public sector will be encouraged, to corporatize, and become companies under the Companies Act.
MUMBAI: The government has allocated Rs 800 crore next fiscal year for development of new ports and ongoing work on its National Waterways project, finance minister Arun Jaitley said Monday in his speech presenting the fiscal budget for 2016-17.

“In 2015, India’s major ports have handled the highest ever quality of cargo. We have also added the highest ever capacity in major ports. We have started a series of measures for modernizing the ports and increasing their efficiency. The Sagarmala project has already been rolled out. We are

planning to develop new greenfield ports both in the eastern and western coasts of the country. The work on the National Waterways is also being expedited. (Rs) 800 crore has been provided for these initiatives,” Jaitley said in his speech.

The cargo traffic of Indian ports increased by 8.2 per cent to 1052.2 million tons in 2014-15, with traffic at non-major

ports increasing at a faster rate than at major ports, according to data on the Economic Survey 2015-16 put out last week. During April to September 2015, while cargo traffic at all ports increased by 1.1%, major ports reported an increase of 4.1% and non-major ports a decline of 1% as compared to the corresponding period in 2014-15. Public sector ports in India are said to be poorly managed and overburdened by growing cargo tonnage. They are also fast losing out to private players such as Adani Ports & SEZ that have been aggressively investing and increasing capacity.

While industrialists cheered the proposal, analysts said the budget is silent on several issues.

" While the budget has highlighted strong impetus on development on highways and roads, there has been some reservation around specific fund allocations for ports,” said Prahlad Tanwar, director for transport and logistics at consultancy KPMG

“While Sagarmala (the government’s port modernisation project) has been mentioned as a comprehensive longer term port transformation initiative, mention of immediate initiatives especially around first and last mile connectivity at key ports to augment port capacity expansion was absent,” he said.

The total budget outlay on the infrastructure sector is Rs 2.21 lakh crore, said Jaitley in his speech

“While understandable that highways and roads requires significant investment boost, it would be important to consider investment in other modal infrastructure for holistic evolution of the logistics ecosystem,” he added.

In his last budget, Jaitley had said ports in public sector will be encouraged, to corporatize, and become companies under the Companies Act. The year before that, he announced the to develop the National Waterway on river Ganga. The Rs. 4200-crore investment entails building the river channel and river ports along the banks of Ganga.

It is slated to help fasten the slow and inefficient transportation of coal to starved power plants in the north and east of India.

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