We believe that robust infrastructure is a pre-requisite for national development, economic growth and improving lives of citizens. Hence, it is good that the government has reiterated its commitment to achieving targets laid out under the national infrastructure pipeline.
But creation and augmentation of infrastructure requires long term financing at reasonable rates. The setting-up of a professionally managed Development Financial Institution with targeted lending portfolio of Rs five lakh crores within three-years is therefore a welcome move since it shall act as a provider, enabler and catalyst for infrastructure financing.
The sharp increase in capital expenditure to Rs 5.54 lakh crores which is 34.5 per cent more vis-à-vis current year showcases that the government’s focus is upon infrastructure and allied sectors.
In addition, the Rs 2 lakh crores being provided to States and Autonomous Bodies for their capital expenditure will further reinvigorate infrastructure creation at the state governmental level across India. This is especially important since the financial health of states and autonomous bodies have been hit badly due to the pandemic thereby restricting their ability to upgrade and augment infrastructural amenities.
Focus on national highway corridors, railway lines including electrification, and metro rail lines will lead to easier and cost effective transport of people and goods across the nation.
The Rs 2,87,000 crore Jal Jeevan Mission (Urban), which aims at universal water supply in all 4,378 Urban Local Bodies with 2.86 crores household tap connections, as well as liquid waste management in 500 AMRUT cities will provide enormous opportunities in this important sector.
The AtmaNirbhar Bharat – Production Linked Incentive scheme wherein the government has committed nearly Rs. 1.97 lakh crores, over five-years starting FY 2021-22 will be a game changer, especially since it will provide a major fillip to construction of industrial and manufacturing facilities – both greenfield and brownfield.
Continuation of tax benefits for affordable housing and tax exemption to rental housing will spur activity in the realty sector thereby providing support to a key industry and creating thousands of new jobs.
The long term prospects of India’s construction and infrastructure sector was always good because the nation needs better and augmented infrastructural amenities. With the impetus provided in this budget through policy and financial support – it will usher in higher growth across the construction and infrastructure sector.