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India's 2014 Budget Promises Cash for 100 Smart Cities, Metros & Much More

Indian Finance Minister, Arun JaitleyThe Indian Finance Minister, Arun Jaitley, in his first budget of the newly-elected Narendra Modi's National Democratic Alliance (NDA) centre-right coalition government, has announced a target of Rs.70,600 million to help create 100 smart cities, and a comprehensive set of measures intended to pave the way for new metro systems, cycling and bus schemes, roads, solar power and cleaning up the polluted river Ganges. He promised clean sanitation for everyone by 2019 and more rainwater harvesting schemes.

Modi promised during his election campaign to set up 100 new smart cities, extending a programme he had implemented in Gujarat, to bring hundreds of thousands of jobs through the construction and development of new urban spaces. The crucial hurdle is that of land rights and Modi's attitude to them. The UPA managed to pass through long-awaited changes to the controversial land acquisition law last year, but it remains to be seen how a BJP government will treat one of the most contentious issues in order to fulfil their promises.

On energy Jaitley said he would allocate Rs.5,000 million for solar power projects. "We will take up solar power projects in Rajasthan, Ladakh." But coal and gas will also receive a boost in an effort to provide sufficient power to increase India's manufacturing capability and establish seven new industrial cities. "We require additional 15,000 km of gas pipelines under PPP. We will resolve existing impasse in the coal sector. We also aim to unlock dead investments in coal, power sectors," Jaitley added.

Jaitley also promised: "We are committed to provide 24 by 7 power to all households."

Rs 378,500 million has been allocated for the road building plan via the National Highways Authority of India, much of which will ensure better connectivity in the North-East of the country.

Rs 116,350 million will go to develop existing ports & harbours and 16 new port projects. We also announce a shipbuilding policy in this fiscal year," Jaitley said.

On trains, railway minister Sadanand Gowda hinted at two proposals under consideration: introducing bullet trains that can travel at over 300 kph on dedicated corridors and running more, conventional 130-150 kph electric multiple units on existing tracks. Prime Minister Modi has already talked of constructing a "diamond quadrilateral" of high-speed trains and ensuring world-class facilities for passengers on the Mumbai-Ahmedabad and the New Delhi-Patna routes.

Rs.2000 million will go towards setting up six textile clusters, in Rae Bareli, Lucknow, Surat, Kutch, Bhagalpur and in Tamil Nadu. A new Rs.300 million educational facility for the textile industry was also announced at Hastkala Academy in Delhi based on public private partnership mode. Jaitley also allocated Rs.500 million for a pashmina (fine cashmere wool) production programme in Jammu and Kashmir.

A controversial idea to link up all of India's rivers, endorsed by the Supreme Court and touted during the election, but widely believed to be potentially ecologically catastrophic, was not mentioned in the speech.

Jaitley also announced Rs 5000 million will go to set up four new AIIMS (All India Institute of Medical Sciences) in AP, West Bengal, Vidarbha and Purvanchal, and new institutions within Delhi-AIIMS and Chennai-AIIMS. Five new IIMs (Indian Institutes of Management) and five new IITs (Indian Institutes of Technology) are also planned. 12 more government medical colleges are proposed, with dental facilities. He said six new AIIMS started recently have become functional. "We are planning to create AIIMS in all states," he said.

"The skill development programme for the youth will encompass multiple areas such as carpentry etc," Jaitley said. The education gap is urgent one for India to fill as 4 percent of Indian children never start school, 58 percent don't complete primary schools and 90 percent don't complete school, according to the Teach for India website.

To better promote equality of opportunity, the Backward Regions Grant Fund (a creation of Prime Minister Manmohan Singh in 2007) will be restructured to fill the critical gap in capacity building in identified backward districts, and broadband connectivity will be extended to village level.

Jaitley concluded by saying that his Budget is only a step in the direction of economic recovery. "We are aiming for a 7-8% GDP growth in 3-4 years. We shall leave no stone unturned in creating a vibrant India."

Whether the government can deliver on these promises remains to be seen. Modi has five years to convince his people that he can achieve the vision he laid out to them when he said: "I want to make the 21st century India's century".

1,000 rupees = $16.7.