Key highlight for the Infrastructure sector in India's Union Budget 2024-2025

On July 23, 2024, Finance Minister Nirmala Sitharaman presented India's Union Budget for 2024-2025, emphasizing substantial investments in infrastructure development. Here, we explore the pivotal allocations and initiatives designed to accelerate India's economic growth:

Capital Expenditure Boost:

·Record allocation of ?11,11,111 crore, constituting 3.40% of GDP

·11.1% increase from the previous year

·Strong focus on completing existing projects and initiating new ones

Sector-wise Breakdown:

Roads & Highways:

·Major chunk of capital expenditure directed towards highway projects

.Emphasis on National Highway Development Program (NHDP) to enhance arterial road network

·Patna-Purnia Expressway: This project aims to improve connectivity between the capital city of Patna and Purnia in eastern Bihar.

·Buxar-Bhagalpur Expressway: This expressway will connect Buxar in the west with Bhagalpur in the east, easing travel and potentially boosting economic activity along the corridor.

·Bodhgaya-Rajgir-Vaishali-Darbhanga Spurs: This announcement likely refers to a network of connecting roads that will improve accessibility to these important historical and religious sites in Bihar.

·Additional Two-Lane Bridge over Ganga at Buxar: This project will likely ease traffic congestion on the existing bridge and improve overall connectivity across the Ganges River.

Railways:

·For FY 2024-25, the government has set a record capital expenditure allocation of Rs 2,62,200 crore for the railways, with gross budgetary support amounting to Rs 2,52,200 crore for the same period.

.Continuation of ?5, 00,000 crore investment plan (2018-2030)

·Focus on modernization, dedicated freight corridors, and station redevelopment

Urban Infrastructure:

·Expansion of Pradhan Mantri Awas Yojana (PMAY) with 3 crore additional houses

·?2.2 lakh crore central assistance over five years for affordable housing

·Increased allocation for metro rail projects in major cities

·Support for e-vehicle charging infrastructure

.Rental housing scheme announced for working class. Govt will facilitate dormitory type rental housing for industrial workers in PPP mode.

Rural Connectivity:

·Launch of Pradhan Mantri Gram Sadak Yojana (PMGSY) Phase IV

·Aim: All-weather connectivity for 25,000 rural habitations

Airports & Seaports:

While specific budgetary allocations for airports and seaports haven't been released yet, the government's continued focus on Public-Private Partnerships (PPP) for these projects is likely to see further development.

State and Regional Support:

? ?1.5 lakh crore for long-term interest-free loans to states

? Regional-specific allocations:

·Bihar: ?11,500 crore for irrigation projects including Kosi-Mechi link, New airports, medical colleges and sports infrastructure in Bihar will be constructed.

.Power projects, including the setting up of a new 2400 MW power plant at Pirpainti, will be taken up at a cost of ?21,400 crore

.Industrial node at Gaya on Amritsar Kolkata Industrial Corridor to be developed.

·New airports, medical colleges and sports infrastructure in Bihar will be constructed

·Assam: Flood management for Brahmaputra River region

·Himachal Pradesh, Uttarakhand, Sikkim: Reconstruction support for natural disasters

.Package announced for Vizag-Chennai Industrial corridor

.Government to provide Rs 15,000 crore financial assistance for Andhra Pradesh for development of Amaravati

.Under the AP Reorganisation Act, funds will be provided for essential infrastructure such as water, power, railways, and roads and also grants for backward regions of Rayalaseema, Prakasam North coastal Andhra Pradesh, as stated in the Act will be provided

Private Sector Engagement:

·Promotion of private investment through viability gap funding

·Introduction of a market-based financing framework

Tourism Infrastructure:

·Development of religious and cultural sites in Bihar, including Vishnupad and Mahabodhi Temple corridors.

·Rajgir development initiative

·Support for Nalanda University revival.

·Tourism development assistance for Odisha

Key Takeaways:

·The budget demonstrates a strong commitment to holistic infrastructure development

·Balanced approach involving central initiatives, state support, and private sector participation

·Focus on both urban and rural infrastructure

·Special attention to disaster-prone areas and tourism potential

Challenges and Outlook:

·Effective implementation and timely completion of projects will be crucial

·Need for active encouragement of private sector participation through PPPs

·Balancing development with environmental sustainability

·This infrastructure push aligns with India's goal of becoming a developed nation by 2047

The Union Budget 2024-2025 sets an ambitious roadmap for India's infrastructure growth. Its success will hinge on efficient execution, addressing potential roadblocks, and fostering collaborative efforts between government and private entities.