The Interim Budget 2024-25 reinforces thrust on infrastructure development with capital spending being raised by 11 per cent to Rs 11.11 trillion or 3.4 per cent of the GDP. In a transformative move, the government announced the implementation of three major economic railway corridor programmes, under the PM Gati Shakti plan, aimed at bolstering multimodal connectivity across the nation. These include energy, mineral and cement corridors, port connectivity corridors, and high traffic density corridors. The government will build 20 million affordable houses in the next five years, to add to the 30 million houses built already. In order to promote clean mobility, the government will expand the EV ecosystem in the country by supporting manufacturing and charging infrastructure. It will also encourage greater adoption of electric buses for public transport through a payment security mechanism.
For 2024-25, the net budgetary allocation for the Ministry of Power has been pegged at Rs 205.02 billion (as against Rs 206.71 billion budgeted in 2023-24). The total investment by its eight state-owned power companies has been proposed at Rs 672.86 billion for 2024-25 (as against Rs 608.05 billion budgeted in 2023-24).
The net budgetary allocation for the Ministry of New and Renewable Energy has been pegged at Rs 128.50 billion for 2024-25 (as against Rs 102.22 billion budgeted in 2023-24). Viability gap funding (VGF) will be provided for harnessing offshore wind energy potential for an initial capacity of 1 GW. Furthermore, the government is poised to strengthen and broaden the electric vehicle ecosystem by offering assistance for manufacturing and charging infrastructure. The government is gearing up to introduce a Biomanufacturing and Bio Foundry programme, an initiative focused on offering eco-friendly alternatives for the production of biodegradable materials.
The Ministry of Housing and Urban Affairs has received an allocation of Rs 775.23 billion. The allocation is 11.91 per cent higher than the revised estimate of Rs 692.70 billion for 2023-24. Of the total allocation, the outlay for Swachh Bharat Mission (Urban) is Rs 50 billion, around 96.08 per cent higher than the revised estimate of Rs 25.50 billion for 2023-24. Meanwhile, an allocation of Rs 104 billion each has been earmarked for the Atal Mission for Rejuvenation and Urban Transformation (AMRUT) and the Smart Cities Mission.
The Ministry of Jal Shakti (MoJS) has received an allocation of Rs 984.18 billion. The allocation is 1.93 per cent higher than the revised estimate of Rs 965.48 billion for 2023-24. Of the total allocation, an outlay of Rs 699.26 has been made for the Jal Jeevan Mission/ National Rural Drinking Water Mission while Rs 71.92 billion has been earmarked under the Swachh Bharat Mission (Gramin).
The Ministry of Road Transport and Highways’ (MoRTH) budget outlay rose 2.80 per cent to Rs 2.78 trillion in 2024-25 (budget estimate) from Rs 2.70 trillion in 2023-24 (BE). As per the revised estimates, MoRTH is likely to spend around Rs 2.76 in 2023-24. The budget of the government-run National Highways Authority of India (NHAI) has grown by 3.9 per cent to Rs 1.68 trillion in 2024-24 (BE) from Rs 1.62 trillion in 2023-24 (BE). As per the revised estimates, the NHAI will spend around Rs 1.67 trillion in 2023-24. The internal and extra budgetary resources (IEBR) for NHAI in 2024-25 remain zero for the third year in a row.
The budget outlay for the Ministry of Petroleum and Natural Gas has decreased by around 27 per cent from Rs 410.10 billion in 2023-24 (budget estimates) to Rs 297.13 billion in 2024-24 (BE). The revised estimates for 2023-24 is anticipated to be around Rs 147.57 billion, utilising only 35 per cent of the allocation for 2023-24.
The Ministry of Ports, Shipping and Waterways has received an allocation of Rs 23.46 billion (budget estimate). The allocation is 5.72 per cent higher than the budget estimate of Rs 22.19 billion and 2.05 per cent lower than the revised estimate of Rs 23.95 billion for FY 2023-24. Of the total allocation, it has provided Rs 1.0 billion for assistance to ship-building, research and development. The centre has provided a grant of Rs 10.87 billion to the Inland Waters Authority of India and Rs 700 million to the development of minor projects. Meanwhile, funds worth Rs 7.0 billion have been earmarked for the Sagarmala programme.
The Ministry of Railway has received an allocation of Rs 2,553.93 billion (budget estimates). The allocation is 4.98 per cent higher than the revised estimate (Rs 2,432.72 billion) and 5.85 per cent higher than the budget estimate (Rs 2,412.68 billion) for FY 2023-24. Of the total allocation in 2024-25, Rs 44.92 billion has been allotted to signalling and telecommunication and Rs 410.86 billion to rolling stock. For infrastructure development, Rs 360.91 billion has been allotted to new lines, Rs 45.34 billion to gauge conversion, Rs 300 billion to doubling works, Rs 171.5 billion to track renewals, and Rs 20.88 billion to bridges, tunnel works and approaches.
The government has allocated Rs 23 billion for the Ministry of Civil Aviation which includes Rs 22.58 billion from revenue and Rs 0.42 billion from the capital. This Rs 23 billion allocation is 26.12 per cent lower than the budget of Rs 31.13 billion which was allocated in 2023-24. This year’s budget also includes an outlay of Rs 3.03 billion and Rs 0.89 billion to the Directorate General of Civil Aviation and the Bureau of Civil Aviation Security respectively. Funds of Rs 5.02 billion have been earmarked for the regional connectivity scheme.
Industry leaders hail the government’s focus on strengthening infrastructure and the supportive measures proposed. Indian Infrastructure captures the post-budget reactions of key industry experts…
- Jatin Aneja, National Practice Head Infrastructure, Energy and Project Finance, Shardul Amarchand Mangaldas & Co. remarks “Heartening to see the focus and impetus by the central government towards infrastructure development and the commitment to transform the country to a ‘Viksit Bharat’ on the backbone of infrastructure development. This would provide the much-needed guidance to municipal and state level planners to take the country and infrastructure development forward.”
- Shashi Kiran Shetty, Founder and Chairman of Allcargo Group said, ”The budget has laid the roadmap for a robust, inclusive, and widespread development to turn the goal of Viksit Bharat or developed India into a reality. The country is geared to enter the accelerated phase of growth keeping environment sustainability the key focus. The budget demonstrates the government’s vision to facilitate green growth and renewable energy transition. The viability gap funding to build 1 gigawatt of offshore wind energy will pave the way for diversification of renewable energy portfolio, making India renewable energy-resilient. For the logistics industry, the budget proposal to develop an enabling EV ecosystem by strengthening manufacturing capabilities and charging infrastructure is extremely encouraging, we are aligning our operations with the country’s sustainability goals. The continued capex boost will further accelerate the progress towards a fully developed and efficient multimodal logistics system critical to make India a global manufacturing hub. Focus on developing port connectivity, railway corridors and decongesting high-traffic corridors will usher in a new era of logistics efficiency. All in all, it’s a growth-focussed budget which has ticked all the important boxes.”
- Chandrashekar V, Managing Director, and Chief Executive Officer of GMMCO comments, “The Rs 11,111.11 billion strong infrastructure push, supported by the three railway corridors, as well as the continued focus on housing for the middle class, underscores the government’s unrelenting attention towards bolstering domestic infrastructure. This push is expected to spawn its own ecosystem of ancillary players, equipment OEMs, and heavy machinery players. GMMCO is uniquely poised to leverage the emerging opportunities and play a significant role in contributing to India’s infrastructure push, in sync with PM Modi’s vision of Atmanirbhar Bharat.”
- Anil Yendluri, Managing Director, Vishwa Samudra Group comments, “Vishwa Samudra Group commends the Interim Budget’s focus on boosting capital expenditure by 11 per cent to over Rs 11,111.11 billion that will lead to asset creation in the economy. We are keen to collaborate with the government on building new ports and infrastructure corridors. With our substantial experience in infrastructure development, we are well-positioned to support this vital push to strengthen India’s economic expansion.”
- Kavita Shirvaikar, Chief Financial Officer and Whole Time Director, Patel Engineering Limited remarks, “In a pivotal stride towards national development, Union Budget 2024 manifests a commendable 11.1 per cent surge in the infrastructure budget, scaling an impressive Rs 11,111.11 billion. This ambitious endeavour reflects the government’s unwavering commitment to fortify critical sectors resulting, in fastrack and timely execution of complex infra projects. With the infrastructure outlay poised to reach 3.4 per cent of the nation’s GDP, the budget signifies a strategic investment, laying a robust foundation for economic growth and sustainable progress. Additionally, the budget strategically leverages a significant threefold increase in capital expenditure over the past four years, propelling substantial economic and infrastructure growth with a powerful multiplier effect”.