Govt proposes to continue expansion of air connectivity and airports
Implementation of three major economic railway corridors have been proposed as part of the infrastructure development in the interim budget for financial year 2024-25
Recognizing the importance of mobility in increasing economic growth, the rail projects are (a) energy, mineral and cement corridors, (b) port connectivity corridors, and (c) high traffic density corridors.
It has also announced that 40,000 normal rail bogies will be converted to Vande Bharat standards to enhance safety, convenience and comfort of passengers.
The Government also proposes to continue the expansion of air connectivity and airports under the earlier introduced UDAN scheme and also the Metro facilities to foster rapid transportation within cities.
Now that India has achieved significant momentum and continues to grow at a rate of over 7% (despite global slowdown and geopolitical uncertainties), there was felt a need to keep the capex in check, to control fiscal deficit and inflation, noted Nishith Desai Associates (NDA) in its budget analysis.
“Thus, the proposed reduction in the rate of increase of outlay for capex from 35-37% to 11.1% is a welcome move and in line with market expectations,” said NDA
The outlay for capex has been increased by 11.1% to Rs.11.11 trillion (3.4 % of the GDP) in the interim budget for financial year 2024-25, was presented by Finance Minister Nirmala Sitharaman on 1 Feb 2024.
Keeping in line with the convention for interim budgets, no major reforms or tax policy changes have been announced. Instead, the Budget has only set out the estimated receipts and expenditure1, fiscal deficit targets, outlay for capital expenditure (capex), and the vision of the current Government for India’s economic and social growth.
In terms of its vision for India, the Government proposes to adopt policies that foster economic growth, and promote social welfare with inclusive development.
“The Budget states that it is an important policy priority for the Government to ensure finances, technology, training, and a conducive regulatory environment for the Micro, Small and Medium Enterprises (MSME), which form the backbone of our economy,” observed NDA.
The Budget also proposes to focus on the development of East India by making the people of the eastern region powerful drivers of India’s growth. Further, through rooftop solarization, the Government proposes to enable 10 million households to obtain up-to 300 units of free electricity every month along with a host of other ancillary benefits.
On the healthcare front, the Government plans to set up more medical colleges by utilizing the existing hospital infrastructure under various departments, encourage vaccination for girls in the age of 9 to 14 for prevention of cervical cancer, expedite the upgradation of anganwadi centres (for early childhood care in rural areas), etc.
As an impetus to the Agricultural sector, Government proposes to promote private and public investment in post-harvest activities including aggregation, modern storage, efficient supply chains etc. It also proposes to achieve ‘atmanirbharta’ (self-reliance) for oil seeds and formulate a strategy for supporting dairy farmers to foster dairy development.
Recognizing the importance of technology and innovation in propelling growth, the Government proposes to establish a corpus of Rs.1 trillion to provide long term financing with low or nil interest rates for technological research and development. It also proposes to launch a new scheme to strengthen deep-tech technologies for defense purposes.
On the green energy front, various measures have been proposed to meet India’s commitment of ‘net zero’. This includes budgetary allocation for harnessing offshore wind energy potential, procuring biomass aggregation machinery, devising schemes for bio-manufacturing and enhancing electrical vehicle (EV) infrastructure.
This will be a temporary Budget until the new Government is elected, which will release the full Budget in July 2024. Fiinews.com
