In an attempt to revive the economy hit by the Covid-19 pandemic, the government has decided to bet on infrastructure development in a big way.

The union cabinet chaired by prime minister Narendra Modi on Wednesday took a slew of landmark decisions, which will go a long way providing a much needed boost to infrastructure across sectors.

Information and broadcasting minister Prakash Javadekar briefed the media through video conference about the cabinet decisions. The highlights are:

Animal Husbandry Infrastructure Development Fund set up

In pursuance of the recently announced Atma Nirbhar Bharat Abhiyan stimulus package, the cabinet has approved the setting up of an Animal Husbandry Infrastructure Development Fund (AHIDF) amounting to Rs. 15,000 crore.

The government had earlier approved the Dairy Infrastructure Development Fund (DIDF) worth Rs. 10,000 crore for incentivizing investment by cooperative sector for development of dairy infrastructure. However, the MSMEs and private companies also need to be promoted and incentivized for their participation in processing and value addition infrastructure in the animal husbandry sector.

The AHIDF would incentive infrastructure investments in dairy, meat processing and animal feed plants. The eligible beneficiaries under the scheme would be farmer producer organizations (FPOs), MSMEs, Section 8 Companies, Private Companies and individual entrepreneur with only 10% margin money contribution by them. The balance 90% would be the loan component to be made available to them by scheduled banks.

The government will provide 3% interest subvention to eligible beneficiaries. There will be two years moratorium period for repayment of loan with six years repayment period thereafter. The government would also set up a Credit Guarantee Fund of Rs. 750 crore to be managed by NABARD which would provide credit guarantee to the projects which are covered under the MSME defined ceilings. Guarantee Coverage would be up to 25% of the Credit facility of borrower.

Benefits: There is huge potential waiting to be unlocked through private sector investment in animal husbandry sector. The AHIDF with the interest subvention scheme for private investors will ensure availability of capital to meet upfront investment required for these projects and also help enhance overall returns/ pay back for investors. Such investments in processing and value addition infrastructure by eligible beneficiaries would also promote exports.

Since almost 50-60% of the final value of dairy output in India flows back to farmers, the growth in this sector can have significant direct impact on farmers’ income. Size of dairy market and farmers’ realization from milk sales is closely linked with development of organized off-take by cooperative and private dairies. Thus, investment of Rs. 15,000 crore through AHIDF would not only leverage several times more private investment but would also motivate farmers to invest more on inputs thereby driving higher productivity leading to increase in farmers income. The measures approved today through AHIDF would also help in direct and indirect livelihood creation for about 35 lakh persons.
 
Kushinagar airport to go international

Kushinagar in Uttar Pradesh is an important Buddhist pilgrimage site, where Gautama Buddha attained Mahaparinirvana. It is regarded as a very sacred Buddhist pilgrimage centre where Buddhists pilgrims from all over the world come for pilgrimage. Kushinagar is dotted with several other Buddhist sites nearby, like Sravasti (238 km), Kapilvastu (190 km) and Lumbini (195 km) that makes it an attraction for both followers and visitors alike. Kushinagar already serves as the presenting site for Buddhist circuit pilgrimage spanning across India and Nepal. The cabinet has approved the proposal to declare Kushinagar airport as an international airport.  

Benefits: The Buddhist Circuit is a key pilgrimage destination for 530 million practicing Buddhists across the globe. Hence declaration of Kushinagar airport as an international airport will offer improved connectivity, wider choice of services at competitive costs to the air travellers resulting in boosting of domestic/international tourism and economic development of the region.

On any given day, around 200-300 devotees from Thailand, Cambodia, Japan, Burma, etc are coming and offering their prayers at Kushinagar. However, this International tourist destination has no direct connectivity, which has been a long pending demand of the visitors.

Direct international connectivity to Kushinagar would substantially increase the number of foreigners and domestic tourists visiting Kushinagar, which will also provide impetus to economic development of the region. The international airport is expected to boost the already growing tourism and hospitality ecosystem in the country.
 
Additional investment by OVL towards further development of Shwe oil & gas project in Myanmar approved

ONGC Videsh (OVL) has been associated with exploration and development of Shwe gas project in Myanmar since 2002, as part of a consortium of companies from South Korea, India and Myanmar. The Indian PSU, GAIL, is also a co-investor in this project. OVL has invested US$ 722 million (about Rs 3,949 crore, as per corresponding average annual exchange rate) till March 31, 2019 in this project. The first gas from Shwe Project was received in July 2013 and plateau production was reached in December 2014. The Project has been generating positive cash flows since FY 2014-15. The cabinet committee on economic affairs on Wednesday approved additional investment of US$ 121.27 million (about Rs 909 crore; 1 US$ = Rs 75) by OVL towards further development of Shwe oil & gas project in Myanmar.

Benefits: The participation of Indian PSUs in oil & gas exploration and development projects in neighbouring countries is aligned with India’s Act East Policy, and also part of India’s strategy to develop Energy Bridges with its neighbours in addition to further strengthening India’s energy security needs.