On 1 February 2023, the Finance Minister, Nirmala Sitharaman, presented her 5th consecutive budget. Being the last full budget before the general elections in the early part of 2024, expectations were sky high from all quarters.
Given the uncertainty prevailing across the globe on economic recovery, the Finance Minister has done a balancing job by concentrating on sustaining the growth through increased capex in key infrastructure sectors like Railways, Roadways, Airports, Tourism, etc.
Reflecting this, the capital investment outlay has been increased by 33 percent to Rs 10,00,961 crore. When compared with similar statistics for 2019-20, this indicates a growth of three times. Further, taking into consideration, the grants-in-aids provided by the Central government to states, the ‘Effective Capital Expenditure’ of the Centre is budgeted at Rs 13.7 lakh crore. This is around 4.5 percent of GDP. The healthy increase in Central government outlay is expected to bring in private investments.
Further, the Finance Minister has decided to continue the 50-year interest free loan to state governments for one more year to spur investment in infrastructure and to incentivize state governments for complementary policy actions. The newly established Infrastructure Finance Secretariat is expected to assist private investment in infrastructure, including Railways, Roads, Urban Infrastructure and Power.
Among the sub-sectors in this sector, the Railways received its highest ever budgetary outlay in the current budget. A total sum of Rs 2.40 lakh crore has been provided in the budget for 2023-24. As of 31 December 2022, there were 1,412 railway projects entailing a total investment of Rs 23,33,569 crore. Of this, 519 projects were under various stages of execution.
The much talked about, Roadways sector again attracted a higher outlay of Rs 2,58,605.53 crore. Of this, the share of NHAI was Rs 1,62,207 crore.
The budget also talked about setting up 50 additional airports, heliports, water aerodromes and advanced landing grounds to improve the regional air connectivity.
In all, 100 critical transport infrastructure projects will be taken up on priority with an investment of Rs 75,000 crore.
Urban Infrastructure Development Fund
The budget proposes to set up an Urban Infrastructure Development Fund (UIDF) to create urban infrastructure in Tier-2 and Tier-3 cities by public agencies. The Finance Minister proposes to make available around Rs 10,000 crore per annum for this purpose.
Education & Skill Development
A number of new schemes have been announced in the budget to enhance the level of Indian education to meet the requirements of Industry 4.0.
To realise the vision of “Make AI in India and Make AI work for India”, three Centres of Excellence for Artificial Intelligence will be set-up in top educational institutions.
Pradhan Mantri Kaushal Vikas Yojana 4.0 will be launched to skill lakhs of youth in the next three years. On-job training, industry partnership and alignment of courses with needs of industry will be emphasized. Under this scheme, 30 Skill India International Centres will be set up across different states. These centres will cover new age courses like coding, AI, robotics, mechatronics, IOT, 3D printing, drones, and soft skills.
Additionally, 100 labs for developing applications using 5G services will be set up in engineering institutions to realise a new range of opportunities, business models, and employment potential. The labs will cover applications such as smart classrooms, precision farming, intelligent transport systems, and health care applications.
The budget mentions about setting up of 157 new nursing colleges attached to existing medical colleges across India.
The National Green Hydrogen Mission, launched with an outlay of Rs 19,700 crore, is expected to facilitate transition of the economy to low carbon intensity, reduce dependence on fossil fuel imports.
The budget provides Rs 35,000 crore for priority capital investments towards energy transition and net zero objective and energy security by the Union Ministry of Petroleum & Natural Gas.
The government aims to create Battery Energy Storage Systems with a total capacity of 4,000 MWh through Viability Gap Funding. It also aims to formulate a detailed framework for Pumped Storage projects.
A notable project under this scheme is setting up an inter-state transmission system for evacuation and grid integration of 13 GW renewable energy from Ladakh with an investment of Rs 20,700 crore.
To conclude, while the increased outlay on Infrastructure projects is a welcome step, faster execution of the projects is the need of the hour.