Budget 2020 allocation to Sagarmala is lower than the cost of planned initiatives

For ports and waterways, Budget 2020 has laid emphasis on considering corporatising at least one major port and its listing on stock exchanges. It has mentioned a governance framework keeping with global benchmarks needed for more efficient seaports. Also, economic activity along river banks to be energized as per Prime Minister’s Arth Ganga concept.

Sharing his reaction on the Budget 2020 Outlook for the Ports sector, K Ravichandran, Senior Vice President & Group Head, Corporate Ratings, ICRA, says, “The government announced that the development on the National Waterway -1 is expected to be completed shortly. Further, the 890 km Dhubri-Sadiya connectivity will be done by 2022. This will make movement of freight/passengers cheaper.” He adds, “The announcement to continue support for the development of other inland waterways (apart from National Waterway 1) is a positive. Further, announced plans to corporatise at least one of the 12 major ports and subsequently list it on the exchanges is a positive step towards government disinvestment in the ports sector.”

“However,” Ravichandran says, “…as seen in previous years, the budget allocation to the Sagarmala projects is lower than the cost of planned initiatives. The revised estimate for Sagarmala in 2019-20 was low – 44 per cent of the Rs 3.17-billion budget estimate for asset creation. The budget allocation for 2020-21 has accordingly been reduced to Rs 2.97 billion.”

Overall, the impact of the budget is neutral on the sector.