A railway station in India. photo: wikipedia
A railway station in India. photo: wikipedia

NEW DELHI: The government is considering plans to entrust the management of smaller airports to non-state entities while the railways will soon invite bids for modernisation of 400 stations, opening up more avenues for private investment in infrastructure. The government has also set up the National Investment and Infrastructure Fund (NIIF) and is in touch with global sovereign and pension funds to become partners in facilitating greater private investment, Finance Minister Arun Jaitley said on Tuesday.

The proposal for allowing management participation of the private sector in some mid-sized and smaller airports is aimed at improving their efficiency, Jaitley said at the foundation day of India Infrastructure Finance Co (IIFCL). The NIIF, with government equity of up to 49%, has been structured as a fund of funds. The government has committed budgetary support of Rs 20,000 crore annually to the NIIF, which will be complemented by private investment besides helping it to leverage debt and equity manifold.

The minister said the railways had raised money through bonds already and intended to mobilise international investment. “The railways has now come on to directionally the right track. We are inviting the private sector, including foreign investment, into infrastructure,” he said. “Very shortly, the railways is going to come up with its proposed bids for development of 400 railway stations in the country.” The finance minister said the government will continue with its thrust on public spending.

“Public investment has been stepped up in the last year and it will continue to remain stepped up,” he said. “When you fight a global slowdown, public investment has to lead the way.” He said India needed to make the most of the challenges posed by global volatility. “We should be able to show much more positive results as far as the Indian economy is concerned, making it a stable force, which we have become even in the midst of a crisis-like situation across the world,” he said.

“The world is passing through a phase of great volatility. There is no easy day. And therefore, the trends that global economy is going to throw up will be challenging.” Lower oil, commodity and mineral prices are troubling for many countries, but mark an opportunity for India, he said. The minister pointed out that savings due to low global commodity prices had helped India deploy money where it was needed. “We will be seriously investing in infrastructure,” he said.

“I find the opportunity provided by the low oil prices has enabled the government to channelise a large part of our savings in central areas of infrastructure.” Substantial expenditure had been directed toward national highways, rural roads and railways, he said. “The result of this is visible now that the stalled projects among the highways have got moving. As a result of enhanced public investment, even private sector players who had got bogged down in their disputes have re-entered the field,” he said.