by Shivdutt Das, Executive Director, Vishwa Samudra Group
The Union Budget 2024, delivered by Finance Minister Nirmala Sitharaman, highlights the Modi government’s strong dedication to strengthening India’s infrastructure. With a significant increase in capital expenditure and targeted investments across various sectors, the budget sets the stage for sustained economic growth and improved quality of life.
One of the standout features of the budget is the 11% increase in capital expenditure for FY25, raising the total outlay to Rs.11.1 lakh crore, which is 3.4% of GDP. This is a continuation of the government’s strategy to drive economic growth through substantial infrastructure investments, building on the 33% hike from the previous year. Increased capital spending not only stimulates economic activity but also creates jobs, boosts private investment, and enhances productivity.
The budget allocates a massive Rs.10 lakh crore for urban housing projects, reflecting a strong push towards improving urban infrastructure. Additionally, Rs.26,000 crore has been earmarked for rural roads development, ensuring balanced growth and connectivity between urban and rural areas. These investments are expected to enhance living standards and support economic activities across regions.
Several regional development projects have been highlighted in the budget. These include a new power plant in Bihar, central assistance of Rs.15,000 crore for developing the new state capital of Andhra Pradesh, and the development of industrial corridors connecting Chennai-Vizag and Bengaluru-Hyderabad. These projects are designed to foster regional economic hubs, thereby decentralizing growth and creating employment opportunities across states.
A significant portion of the budget is dedicated to modernizing the Indian Railways. The allocation of Rs.2.55 lakh crore will support the modernization and expansion of the railway network. The conversion of 40,000 rail bogies to Vande Bharat standards and the introduction of additional Vande Bharat trains are key aspects of this modernization drive, aimed at enhancing safety, convenience, and passenger comfort.
The PM Gati Shakti initiative receives continued support in Budget 2024. This program focuses on improving multi-modal connectivity and logistics efficiency, which is crucial for reducing logistic costs and decongesting high-traffic corridors. The development of three major economic railway corridors under this initiative is expected to significantly enhance the supply chain ecosystem, facilitating faster and more efficient movement of goods and passengers.
The budget also emphasizes investment in public infrastructure projects, including transit-oriented development in 14 large cities and investments in water treatment, sewage treatment, and solid waste management projects to improve environmental sustainability and public health. These projects are aimed at creating a more liveable and sustainable urban environment, enhancing the quality of life for citizens.
Encouraging private sector participation in infrastructure development through viability gap funding and enabling policies is another key aspect of the budget. Large business groups have already proposed multi-billion-dollar investments in various infrastructure projects, and the government’s measures are expected to attract more private investment. This collaboration between the public and private sectors is crucial for financing and executing large-scale infrastructure projects.
India’s rapid economic recovery from the COVID-19 pandemic has been significantly aided by increased infrastructure spending. The budget’s emphasis on infrastructure is expected to have a strong multiplier effect on the economy, enhancing productivity, connectivity, and ease of travel. The government’s long-term vision is to transform India into a developed economy by 2047, with infrastructure development playing a pivotal role in achieving this goal.
The Budget 2024 reaffirms the Modi government’s commitment to infrastructure development as a cornerstone of India’s economic strategy. By significantly increasing capital expenditure, supporting regional development, modernizing railways, and encouraging private sector involvement, the budget lays a strong foundation for sustained economic growth. As India aims for a $5 trillion economy by the end of this decade, the focus on infrastructure will be instrumental in realizing this ambitious vision.
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