Moneycontrol
Last Updated : Feb 04, 2019 01:20 PM IST | Source: Moneycontrol.com

Budget 2019: Allocation for inland waterways declines despite Centre’s push for infrastructure

Funds allocated for inland waterways was at Rs 891.13 crore (revised estimate) in 2018-19, which has been reduced to Rs 757 crore for 2019-20.

Nikita Vashisht @nikita_vashisht

Despite the government stressing on enhancing inland waterways over the next 10 years, allocation for the same was reduced by 15.05 percent in the 2019 Interim Budget.

Funds allocated for inland waterways was at Rs 891.13 crore (revised estimate) in 2018-19, which has been reduced to Rs 757 crore for 2019-20.

Although Finance Minister Piyush Goyal in his speech said, "Efforts in the Sagarmala programme will be scaled up and we (government) will develop other inland waterways faster," the allocation seems to be in contrast with the intention.

Moreover, budgetary support for inland waterways' projects has been reduced from Rs 497.54 crore to Rs 307 crore, which is 38.3 percent lower.

Moneycontrol has reached out to Inland Waterways Authority of India (IWAI) for comment and is awaiting a response.

Nonetheless, Vishwas Udgirkar, Partner at Deloitte India, said that the budget had no clear indication related to the allocation under various infrastructure schemes except railways, thus it can't be said how much would be spent over the next one year.

"Most of the allocations have seen single digit growth... We hope that the budget in July is more clear," he told Moneycontrol.

India has notified 111 waterways, as per the National Waterways Act, to push water transportation in a big way.

India has nearly 14,500 km of navigable waterways, about 5,200 km of the river and 4,000 km of canals. Estimates provided by the World Bank, however, show that India's freight movement through waterways has an "insignificant share" of 0.5 percent till date compared to 65 percent by road and 27 percent by rail.

Union minister for Shipping, Nitin Gadkari, wishes to divert traffic from highways and railways to waterways to save logistics cost.

The logistical costs in India are around 18 percent; much higher than that of other countries: 8-10 percent in China, 10-12 percent in the European Union. A study by ASSOCHAM-Resurgent India (2016) had stated that India can save $50 billion if logistics cost reduces from 14 percent to 9 percent of GDP.

Budget 2019-20 was also silent on any capital investment in IWAI.

Goyal, however, highlighted India's first cargo consignment by PepsiCo from Varanasi to Haldia that was carried out in 2018 across the National Waterway - 1.

He stressed that India would soon carry cargo consignment over National Waterway - 2 in Brahmaputra.

While overall allocation of funds for the Shipping Ministry dipped by two percent, from Rs 1,938.76 crore to Rs 1,902. 56 crore, allocation under Sagarmala, the government's flagship port led development programme witnessed a rise in allocation from Rs 381.08 crore to Rs 550 crore.

Further, over 400 projects will be implemented under Sagarmala between 2015 and 2035. According to government data, 415 projects will be undertaken out of which 189 will be for port modernisation, 170 for connectivity enhancement, 33 for port-linked industrialisation and 23 will be for coastal community development.
First Published on Feb 1, 2019 10:19 pm
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