Union Budget 2024-25 underscores the intent of the NDA 3.0 government to continue its focus on infrastructure. Allocations across segments have been maintained, targets remain ambitious and policy continues to be supportive.
Apart from budgetary support and other government funding and domestic investment via bank credit and specialised investment vehicles, foreign direct investment (FDI) investments in infrastructure increased in FY 2024 after a three-fiscal dip. FDI flows during 2024-25 have also seen momentum. The renewables segment remains the most favoured by foreign investors, although there have also been notable investments in conventional power, roads, logistics, etc. Bank credit to the construction and infrastructure sectors is up, and multilateral support for projects continues. A review of policy developments across sectors…
Aviation
The Ministry of Civil Aviation was allocated Rs 23.57 billion in the budget, including an outlay of Rs 5.02 billion for the Regional Connectivity Scheme. The GST rate on aircraft engines and spares was unified at a moderate rate of 5 per cent.
Construction at the Navi Mumbai International Airport, Jewar (Noida) International Airport and Bhogapuram greenfield airport (in Andhra Pradesh) continues on schedule. New cargo facilities are being operationalised at the Shaheed Bhagat Singh International Airport in Chandigarh, Andal (Durgapur) airport in West Bengal, and Pune airport.
Among airlines, Akasa Air is going international, while Zooom Air and regional airline Fly91 are operational. JettWings Airways has been granted permission to connect airports in the Northeast, West Bengal, Uttar Pradesh and Bihar under the Ude Desh ka Aam Naagrik scheme, while Air Kerala has received an initial no-objection certificate. Additionally, the merger of Air India and Vistara to form a full-service carrier has been approved.
In October 2023, India Infrastructure Finance Company Limited sanctioned loans amounting to Rs 88 billion to enhance airport infrastructure. The GMR Group funded the Bhogapuram International Airport with a loan of Rs 40 billion, while the National Investment and Infrastructure Fund invested Rs 6.75 billion in the airport through compulsory convertible debentures.
Oil and gas
The oil and gas sector saw new discoveries, the implementation of midstream projects and policy changes to promote biogas and hydrogen blending in city gas distribution (CGD) networks. The guidelines for the development of pipeline infrastructure for injecting compressed biogas into CGD networks were approved, with an outlay of Rs 9.94 billion.
Oil and Natural Gas Corporation Limited discovered two natural gas reserves in the MN-DWHP-2018/1 block in the Mahanadi basin in the Bay of Bengal. In May 2024, the Ministry of Petroleum and Natural Gas (MoPNG) held auctions of discovered small fields (DSFs). The contract areas include B-12C-2 DSF at MB/OSDSF/C37/2024 in the Mumbai offshore basin; B-15A-1 and B-15-2 DSF at MB/OSDSF/B15/2024 in the Mumbai offshore basin; and SR-ONCBM (Raniganj)-2024 in the South Rewa Damodar basin.
Five firms won licences for developing CGD networks in eight geographical areas under Rounds 12 and 12A of CGD bidding. The anticipated investment for the twelfth round is around Rs 410 billion. The MoPNG also invited bids in January 2024 for the exploration and development of 28 oil and gas blocks under the ninth round of the Open Acreage Licensing Programme.
Water and wastewater
Union Budget 2024-25 allocated Rs 213.23 billion to the Department of Water Resources, River Development and Ganga Rejuvenation. Additionally, Rs 773.91 billion was allocated to the Department of Drinking Water and Sanitation, of which Rs 701.63 billion was allocated to the Jal Jeevan Mission. An amount of Rs 825.77 billion was allocated to the Ministry of Housing and Urban Affairs, of which Rs 80 billion was allocated to the Atal Mission for Rejuvenation and Urban Transformation 2.0. The centre an nounced plans to promote water supply and sewage treatment projects and services for 100 large cities through bankable projects in partnership with state governments and multilateral institutions.
Transport
The budget allocated Rs 249.32 billion for various metro rail and mass rapid transit projects, an increase of 7.91 per cent over that in 2023-24 (revised estimate). This includes an outlay of Rs 35.96 billion for regional rapid transit system projects of the National Capital Region Transport Corporation. The union cabinet approved an investment of Rs 84 billion for Corridor 2 (Inderlok-Indraprastha) and Corridor 6 (Lajpat Nagar-Saket G Block) of the Delhi Metro Phase IV project in March 2024. These may be jointly funded by the central government, the Delhi government and various funding agencies. Further, the Public Investment Board approved the construction of the Rithala-Narela-Kundli metro line at a cost of Rs 62.31 billion.
Roads
The union budget increased the allocation for the road sector by 3 per cent to Rs 2.78 trillion. An outlay of Rs 260 billion is proposed for four road projects: the Patna-Purnea expressway, the Buxar-Bhagalpur highway, the Bodhgaya-Rajgir-Vaishali-Darbhanga spurs and another bridge over the Ganga in Buxar, Bihar.
The Ministry of Road Transport and Highways (MoRTH) is accelerating construction work, developing multimodal logistics parks (MMLPs), adopting technology and switching to sustainable fuels and construction materials. Modifications have been made to the model concession agreements for the toll-operate-transfer (TOT) model and build-operate-transfer projects.
In the past year, 12,439 km of highways were constructed at a pace of 34 km per day. During 2023-24, MoRTH raised Rs 403.14 billion through road monetisation. Of this, around Rs 159.68 billion was raised through the mo etisation of four TOT bundles, around Rs 157 billion through the infrastructure investment trust (InvIT) route and around Rs 86.46 billion through securitisation. Overall, toll collection under the National Highways Authority of India reached Rs 548.11 billion.
Under the Bharatmala Pariyojana, around 26,425 km of national highways were awarded, with approximately 17,411 km constructed at a total expenditure of Rs 4.59 trillion, as of March 2024. MMLPs were awarded in Jogighopa, Indore, Chennai, Bengaluru, Nagpur and Jalna. As of May 2024, bids were invited for MMLPs in Anantapur, Pune and Nashik.
In May 2024, the Pune Outer Ring Road Project was awarded to Megha Engineering and Infrastructure Limited at an estimated cost of Rs 275.69 billion. The Nagpur-Gondia Access Controlled Super Communication Expressway Project (Package NG 02) was awarded to Afcons Infrastructure Limited at an estimated cost of Rs 284.9 billion. In March 2024, Roadway Solutions India Infra Limited secured two awards, of Rs 12.28 billion for Package VIII and Rs 8.21 billion for Package IX of the Vadodara-Mumbai Expressway Project.
In October 2023, the Delhi-Vadodara Expressway spanning 244.5 km and costing about Rs 118.95 billion, was inaugurated. In January 2024, the Mumbai Trans Harbour Link (Atal Setu), spanning 21.8 km at a cost of Rs 178.43 billion, was operationalised.
Maritime
Under Union Budget 2024-25, the Ministry of Ports, Shipping and Waterways received an allocation of Rs 23.77 billion, an increase of 7.12 per cent over the estimate for 2023-24. Funds worth Rs 7 billion have been earmarked for the Sagarmala programme.
In October 2023, the Maritime Amrit Kaal Vision 2047 was launched. This long-term blueprint aims to quadruple port capacity to 10,000 million tonnes per annum (mtpa) and secure 100 per cent public-private partnerships for 12 major ports.
Other key initiatives include the launch of the Strategic Actions to Aid Growth and Rewards scheme; digital modules in the Sagar Setu platform such as the maritime single window and the Mercantile Maritime Department; the Harit Nauka guidelines; and a river cruise tourism road map, at an estimated investment of Rs 450 billion. In June 2024, the union cabinet approved the development of Vadhavan port. The project, with a capacity of 298 mtpa and 9.87 million twenty-foot equivalent units, will cost Rs 762.2 billion.
In February 2024, India’s first indigenously developed hydrogen fuel cell ferry was launched in Kochi. In January 2024, a new dry dock at the Cochin Shipyard and its International Ship Repair Facility were inaugurated. In December 2023, the Ministry of Defence signed a contract with Mazagon Dockyard Shipbuilders Limited to procure six offshore patrol vessels for the Coast Guard. In November 2023, three anti-submarine warfare shallow-watercraft were launched in Kochi.
In June 2024, the Indian Register of Shipping and the Uttar Pradesh Transport Department signed an MoU to set up the Uttar Pradesh Inland Waterways Authority. Projects worth Rs 3.08 billion were launched for the Northeast. The Kalughat inland waterway transport terminal and two jetties in Bettiah, Bihar, were inaugurated, and dredging commenced at NW-44 (Ichamati river).
Devangshu Datta
