– by Niranjan Hiranandani
With a vision to make India a USD 5 trillion economy, the Modi 2 government in the center, presented its maiden budget focusing on investing massively on building infrastructure to support India’s long-term growth. The government intends to invest more than Rs.100 lakh crore in the infrastructure sector in the next 5 years. This will contribute to the nation’s economic growth and bring positive sentiment to the construction and the real estate industry.
Though India is far ahead of many emerging economies, the government is leaving no stone unturned to boost the economy via investments mainly in infrastructure, which will have multiplier benefits and also create jobs at various levels, bringing about improved productivity. The Rs. 100 lakh crore investments in infrastructure over the next five years is reflective of the importance placed on the GDP, nation-building, employment along with a special emphasis on building last-mile connectivity by the government.
The increased focus by the government on the development of railways, roads, aviation, ports, smart cities, power and intra-city connecting networks like metro rail, Udan will give a thrust to the infrastructure fabric of the country. These are important measures that will boost the recovery and further expansion of real estate in the country.
The government plans to mobilize Rs 50 lakh crore investments in the Railway Infrastructure Development by 2030. Budget allocation for the railways sector has been increased from Rs 53,060 crore to Rs 65,837 crore in line with announced investment in the railways sector. Railways being one the largest employer in India, this expansion drive will create massive employment opportunities for the youth of the country.
The rail network expansion will help India Inc, to improve its last-mile connectivity and enable better mobility infrastructure for passengers and goods, resulting in growth and expansion of business across the country.
Under the UDAN scheme, more than 100 airports are operating in India. The government will prepare a blueprint for regional airports to connect various towns and cities across India to improve connectivity.
Under roads, the government plans to launch Phase 2 of Bharatmala Pariyojana for providing seamless connectivity to the interior and backward areas and borders of the country. Pradhan Mantri Gram Sadak Yojana Phase 3 envisages upgrading 1.25 lakh km of road length at an estimated cost of Rs 80,250 crore.
The Sagarmala Scheme will look into the development of Port and related infrastructure to reduce logistics costs for exports and domestic trade with minimal infrastructure investment, which will increase the efficiency of the supply chain sector. The project will drastically reduce the logistics cost in India and our industries more competitive.
The Budget seeks to provide an impetus to Transit-Oriented Development (TOD) model to spur commercial activities along corridors and the Multi-modal corridor will help in seamless geographical interlinking. To provide a thrust to ‘Make In India’ initiative, the government is exploring new modes of transport like inland waterways, developing, regional airports for remote connectivity and speeding the development of national highways. Such semi-urban and remote connectivity will set a level playing field to augment the service sector resulting in the migration workforce. The Budget is high on vision and instills confidence about the future of India
To accomplish the challenge, the finance minister has motivated more public sector participation in infrastructure investment, which will re-invigorate private investment in the sector.
The announcements concerning the infrastructure sector are positive and realistic but it would be a gigantic task to translate the intentions into reality.