The budget 2023-24 presented by union Finance Minister Nirmala Sitharaman in Parliament on Wednesday placed a strong emphasis on boosting the country’s economy through increased investment. The capital investment outlay saw a steep rise for the third year in a row, with a 33 percent increase to Rs 10 lakh crore, equivalent to 3.3 percent of the GDP.
This outlay, nearly three times the amount from 2019-20, is central to the government’s efforts to drive growth potential, create jobs, attract private investments, and provide a buffer against global challenges. In her budget speech, Union Finance Minister, Nirmala Sitharaman said, “This substantial increase in recent years is central to the government’s efforts to enhance growth potential and job creation, crowd in private investments, and provide a cushion against global headwinds.”
The finance minister also spoke about creating more opportunities and enhancing the investment experience for private sectors in critical infrastructure for which a newly established Infrastructure Finance Secretariat (IFS) is being created that will assist all stakeholders for more private investment in infrastructure, including railways, roads, urban infrastructure and power, which are predominantly dependent on public resources.
While delivering her budget speech in the Parliament, Nirmala Sitharaman touched upon all the important sectors that would drive the growth story on India’s economy and future. She also briefed the parliament and the nation about the government’s plan in several of the infrastructure sectors, including the railways, urban development, aviation, urban cities, urban sanitation, logistics growth capacity of the country amongst others.
For any country’s growth story transport infrastructure is the most critical sector and keeping this in mind the finance minister said during her budget speech that the government has proposed to provided Rs 2.40 lakh crore to railways in the coming fiscal for the development of the Indian railways and also building newer infrastructure. Remember, this is the highest ever funds that have been provided to the railways since inception. The finance minister told the Parliament, “This highest ever outlay is about 9 times the outlay made in 2013- 14.”
The Indian government is already building robust infrastructure for the railways. It also recently introduced multiple Vande Bharat trains in important routes across the country. The railways also introduced vista dome trains in various tourist destinations to bolster railway tourism. The Indian government is also eyeing the introduction of the first ever bullet train in the country. Not only the railways, the Indian aviation sector is also witnessing one of the fastest growth across the globe.
The Indian government’s regional connectivity scheme also helped in increasing the air traffic in the country as it connected several underserved or unserved airports across the country. Under the regional connectivity scheme the finance minister said during her budget speech that 50 additional airports, heliports, water aerodromes and advance landing grounds will be revived for improving regional air connectivity. Shamsher Dewan, Senior Vice President & Group Head – Corporate Ratings, ICRA Limited said, “The Union budget 2023-24 has reiterated its focus on improving regional air connectivity through the setting up of 50 additional airports, heliports, water aerodromes, and advanced landing grounds revival, which will boost domestic air travel.
Further, the budget provides a lot of thrust on the promotion of tourism through the development of 50 tourist destinations covering various aspects and further through the development of theme-based local tourist spots. This will also promote international tourism and hence international air travel along with domestic air travel.”
While Ajay Singh, Chairman and Managing Director, SpiceJet said, “The budget is growth oriented and yet prudent and responsible. Coming as it does in a year when India has assumed the presidency of the G20, it is an object lesson in how an economy should be managed in a crisis. Today, our economy is growing at the fastest pace in the world, inflation is reducing, fiscal deficit is under control and the country continues to increase spending on infrastructure. Truly, India is the bright spot in an uncertain world.” Keeping in view the importance of logistics and logistical infrastructure for the growth story on India, the finance minister has proposed to set up One hundred critical transport infrastructure projects, for last and first mile connectivity for ports, coal, steel, fertilizer, and food grains sectors have been identified.
“They will be taken up on priority with investment of Rs 75,000 crore, including Rs 15,000 crore from private sources.” Nirmala Sitharaman said. For the development of cities and development of urban infrastructure the finance minister proposed that an Urban Infrastructure Development Fund (UIDF) will be established through use of priority sector lending shortfall.
“This will be managed by the National Housing Bank, and will be used by public agencies to create urban infrastructure in Tier 2 and Tier 3 cities. States will be encouraged to leverage resources from the grants of the 15th Finance Commission, as well as existing schemes, to adopt appropriate user charges while accessing the UIDF. We expect to make available ` 10,000 crore per annum for this purpose.”
Finance Minister Nirmala Sitharaman said during the Budget speech. The Prime Minister’s vision of providing housing for all by 2024 was also reflected in the budget speech by the finance minister. The finance minister has increased the budgetary outlay for the Pradhan Mantri Awas Yojana (PMAY) by 66 per cent to over Rs 79,000 crore.
Anuj Puri, Chairman of ANAROCK Group said, “The new measures announced in the Union Budget 2023-24 may certainly help unleash Indian economy’s potential. However, from a real estate point of view, there were no major direct announcements that could be seen as immediate booster shots. However, the enhanced allocation for PM Awaas Yojana by 66% to over INR 79,000 crores is certainly a boost for affordable housing, which was flagging due to increased input costs and also because the buyers in this segment, mostly from the unorganized sector, were still reeling under the impact of the pandemic.