Cleaner fuel gets a push in its budget announcement. Demand for M&HCV and buses to rise on account of increased infrastructure spend.
01 Feb 2021 | 5829 Views | By Shahkar Abidi
Making its intentions clear about pushing cleaner automotive fuel, the Finance Minister revealed a spree of measures in the Budget including increasing CNG availability in 100 additional districts, expansion of metro rail network and augmentation of city bus services amongst others.
The development clubbed together is likely to go a long way ...
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Making its intentions clear about pushing cleaner automotive fuel, the Finance Minister revealed a spree of measures in the Budget including increasing CNG availability in 100 additional districts, expansion of metro rail network and augmentation of city bus services amongst others.
The development clubbed together is likely to go a long way in realising India's goal of moving away from polluting conventional fuels such as gasoline and diesel, which are amongst the primary reasons for air pollution and dent on national exchequer.
According to Finance Minister Nirmala Sitharaman, around 100 more districts across the country will connect with the City Gas Distribution (CGD) network in the next three years. CNG, which is part of CGD setup, is dispensed through CNG refuelling stations for automobile usage. As of November 2020, the total number of CNG stations stood at 2543 on a pan-India basis. However, there seems to be significant geographical disparity in its network layout as nearly 76 percent of these CNG stations are concentrated in Delhi, Gujarat (including Dadra & Nagar Haveli and Daman and Diu), UP and Maharashtra. This has prevented CNG adoption in most parts of the country. CNG is 60% cheaper than petrol and 45% cheaper than diesel and given the volatility in petrol-diesel prices more vehicle users are making a shift to CNG powered vehicles and is fast gaining prominence as a preferred fuel especially in the case of public transportation. Hopefully, now with further expansion of the CGD system, we can hope that CNG may find wider acceptance.
Another important step which government has taken in this regard is announcement of setting up of an independent Gas Transport System Operator (GTSO) for facilitating and coordinating the booking of common carrier capacity in all-natural gas pipelines on a non-discriminatory open access basis.Gas pipelines are the most cost effective and safest mode of transportation of natural gas to its end users . Therefore, an interconnected National Gas Grid has long been envisaged to ensure the adequate availability and equitable distribution of natural gas in all parts of the country. At present, there are about 17,016 km of Natural Gas pipelines which are operational in the country and additional pipelines are under construction to complete the National Gas Grid.
Urban Infrastructure
Further, in order to raise the share of public transport in urban areas, the Government has sought to expand metro rail connectivity apart from augmentation of city bus services. A total of 702 km of conventional metro is operational and another 1,016 km of metro and RRTS is under construction in 27 cities. Two new technologies i.e., ‘MetroLite’ and ‘MetroNeo’ will be deployed to provide metro rail systems at much lesser cost with the same experience, convenience and safety in Tier-2 cities and peripheral areas of Tier-1 cities, the minister added in her speech.
Likewise, a new scheme has been planned to be launched at a cost of Rs 18,000 crores to support augmentation of public bus transport services. The scheme will facilitate deployment of PPP models to enable private sector players to finance, acquire, operate and maintain over 20,000 buses. It is pertinent to note that demand for Commercial Vehicles (CV), especially the buses had come to a standstill amidst the current pandemic. The announcement will surely help in reviving the demand for buses.
Road Infra
The government has announced providing an enhanced outlay of Rs 1,18,101 lakh crores for Ministry of Road Transport and Highways, of which Rs 1,08,230 crores is for capital, the highest ever. As per statistics available with ministry of highways, more than 13,000 km length of roads, at a cost of Rs 3.3 lakh crores, has already been awarded under the Rs 5.35 lakh crores Bharatmala Pariyojana project of which 3,800 kms have been constructed. By March 2022, the Government expects to award another 8,500 kms and complete an additional 11,000 kms of national highway corridors. Also, the National Infrastructure Pipeline (NIP) which was announced in December 2019 and launched with 6835 projects has now been expanded to 7,400 projects. Around 217 projects worth Rs1.10 lakh crores under some key infrastructure Ministries have been completed, the Finance Minister added.
A significant percentage of infra project budget for poll bound States
A significant portion of big infrastructure projects announcement incidentally are for States which are heading for assembly polls in near future. Tamil Nadu, Kerala, Assam and Bengal are some of the States for which announcements have been made in rail and road infrastructure projects. About Rs 1.03 lakh crore has been set aside for Tamil Nadu while another Rs 65,000 Crore has been earmarked for Kerala. Likewise, West Bengal has got Rs 25,000 crore worth of projects while Assam has received around Rs 34,000 crore of investment pie. Incidentally, many of these states are also heading for assembly elections.