Centre announces infrastructure projects, farmer support as part of 100 day programme

New Delhi: The National Democratic Alliance (NDA) government has hit the ground running by announcing infrastructure projects and farmer support in its second Cabinet meeting since taking charge earlier this month.

The Cabinet on Wednesday approved two infrastructure projects—a ₹76,220 crore port in Maharashtra that will boost cross-border trade and a ₹2,869.65 crore expansion of the airport at Varanasi—Prime Minister Narendra Modi's parliamentary constituency. 

It also decided to increase the minimum support price for kharif crops and approved funds for a forensic university, Information and Broadcasting minister Ashwini Vaishnaw told reporters after the meeting.

Read Also: In 100-day agenda, food processing ministry to incorporate reduction of food wastage in supply chain

Vaishnaw said the proposed “all-weather greenfield deepdraft major port” at Vadhavan in Maharashtra will be one of the top 10 ports in the world.

The project will be carried out by Vadhavan Port Project Ltd (VPPL), a company set up by the Jawaharlal Nehru Port Authority (JNPA) and Maharashtra Maritime Board (MMB) with a shareholding of 74% and 26%, respectively.

Roads, rail linkages, trade flow

The project cost includes land acquisition and infrastructure building. The government also cleared building roads between the port and national highways and establishing rail linkages to the existing rail network. The project will create a cumulative capacity of 298 million metric tonnes (MMT) a year, including around 23.2 million TEUs (twenty-foot equivalent) of container handling capacity, an official statement said.

It will aid trade flow through the planned India Middle East Europe Economic Corridor and can create around one million jobs, the statement said. 

Meanwhile, Airports Authority of India (AAI) will develop the Lal Bahadur Shastri International Airport in Varanasi. It will enhance its passenger handling capacity to 9.9 million passengers a year from the existing 3.9 million passengers a year.

The decisions signal the NDA government will continue its capital expenditure to build infrastructure in the country, which has a multiplier effect in the economy, while also not hesitating to make revenue expenditure such as price support to farmers to boost their incomes.

Read Also: Cabinet approves increase in MSP of 14 kharif crops for 2024-25 season

The Cabinet approved an increase in the minimum support price (MSP) of all 14 Kharif crops for the 2024-25 marketing season. The decision has been taken to ensure remunerative prices to farmers.

With Wednesday's decision, farmers will get around ₹2 trillion as MSP, Vaishnaw explained. This is ₹35,000 crore more than the price support given in the previous season, the minister said at the briefing.

"The hike in MSP of Kharif Crops is in line with the PM Modi's third term vision of policy continuity to support farmers and boost their income," Vaishnaw added.

Higher MSP over the previous year has been approved for oilseeds like nigerseed and sesamum by about ₹983 and ₹632 and fixed at ₹8,717 and ₹9,267 per quintal, respectively.

Pulses like tur or arhar (pigeon pea) have also been considered for higher MSP – by about ₹550 from last year at ₹7,550 per quintal. This assumes significance as the government has been trying to achieve self-sufficiency in pulses and oilseeds amid falling production.

The MSP of paddy, the main kharif crop, has been raised by ₹117 to ₹2,300 per quintal for common grade variety and to ₹2,320 for grade A variety.

The increase in MSP for kharif crops is in line with the Union Budget 2018-19, which fixed the MSP at a level of at least 1.5 times of the average cost of production. The expected margins to farmers over their cost of production are estimated to be the highest for bajra (77%) followed by tur (59%), maize (54%) and urad (52%). For the rest of the crops, margins are estimated to be at 50%, an official statement read.

The imputed cost of family labour is pathetically low, as it is just about 30% of the paid-out cost and is about ₹325 per quintal for paddy. It ranges between ₹40-60 per hour across states and turns out to be ₹15,000 to ₹20,000 per cropping season for paddy. How do we expect the farmer to take care of even the most basic needs with these earnings?" said Anil Sood, an agricultural expert and a professor at the Institute for Advanced Studies in Complex Choice.

In a major move to boost renewable energy capacity addition, the cabinet approved a viability gap funding (VGF) scheme for offshore wind energy projects with an outlay of ₹7,453 crore, including an outlay of ₹6,853 crore for installation and commissioning of 1 GW of offshore wind energy projects (500 MW each off the coast of Gujarat and Tamil Nadu), and grant of ₹600 crore for upgradation of two ports to meet logistics requirements for offshore wind energy projects.

The VGF support from the government will reduce the cost of power from offshore wind projects and make them viable for purchase by discoms. While the projects will be established by private developers selected though a bidding process, the power excavation infrastructure, including the offshore substations, will be constructed by Power Grid Corporation of India Ltd (PGCIL).

The successful commissioning of 1 GW offshore wind projects will produce renewable electricity of about 3.72 billion units annually, which will result in an annual reduction of 2.98 million tonnes of CO2 emissions for a period of 25 years. Further, this scheme will not only kick start the offshore wind energy development in India but also lead to the creation of the required ecosystem to supplement India's ocean-based economic activities.Vaishnaw said that India has a potential of 70 GW offshore wind capacity. The move is in line with the government's ambitious 500 GW non-fossil capacity capacity by 2030.

Though the National Offshore Wind Energy Policy was notified in 2015, there has been no major development on that front so far given that these projects are highly capital intensive and the power generated through these projects would be expensive. The VGF is now expected to lower the tariffs of power generated through these offshore wind projects.

The Cabinet also approved a plan to enhance the forensic infrastructure in the country with an outlay of ₹2254.43 crore by FY29.