A BOOSTER to INFRA PUSH

The Covid has started melting down and the market is bouncing back to its normalcy. The economic survey indicates this as India's economic growth estimated at 9.2% is to be the highest among all large economies. In this positive market scenario, the Budget 2022 presented by Finance Minister Nirmala Sitharaman is an extension of the Central Government's special programmes such as Bharatmala, Pradhan Mantri Awas Yojana (PMAY), and Gati Shakti. The major focus of the Budget is on the seven engines of roads, railroads, airports, ports, public transportation, waterways, and logistics infrastructure to power the PM Gati Shakti Master Plan.  

Infrastructure development plays a pivotal role in the growth of any country. Considering this fact, every government used to give due importance and allocation in their annual budget for infrastructure development. The past couple of years were unique after the unprecedented situation arised after the pandemic hitting the market. As the market is bouncing back with projects taking off, the government in the current Budget has given special attention for the revival and further development of the sector.

Some of the key announcements related to infrastructure and real estate segments are:

Road Transport

• National Highways Network to be expanded by 25,000 km in 2022-23
• Rs 20,000 crore to be mobilized for National Highways Network expansion

Multimodal Logistics Parks

• Contracts to be awarded through PPP mode in 2022-23 for implementation of Multimodal Logistics Parks at four locations

Railways

• One Station One Product concept to help local businesses & supply chains
• 2000 Km of railway network to be brought under Kavach, the indigenous world class technology and capacity augmentation in 2022-23
• 400 new generation Vande Bharat Trains to be manufactured during the next three years
• 100 PM GatiShakti Cargo terminals for multimodal logistics to be developed during the next three years

Parvatmala

• National Ropeways Development Program, Parvatmala to be taken up on PPP mode
• Contracts to be awarded in 2022-23 for 8 ropeway projects of 60 km length

Har Ghar, Nal Se Jal

• Rs 60,000 crore allocated to cover 3.8 crore households in 2022-23 under Har Ghar, Nal se Jal

Housing for All

• Rs 48,000 crore allocated for completion of 80 lakh houses in 2022-23 under PM Awas Yojana

Urban Planning

• Modernization of building byelaws, Town Planning Schemes (TPS), and Transit Oriented Development (TOD) will be implemented.
• Battery swapping policy to be brought out for setting up charging stations at scale in urban areas.

Telecom Sector

• Scheme for design-led manufacturing to be launched to build a strong ecosystem for 5G as part of the PLI Scheme

Atmanirbharta in Defence

• 68% of capital procurement budget earmarked for domestic industry in 2022-23, up from 58% in 2021-22
• Defence R&D to be opened up for industry, startups and academia with 25% of defence R&D budget earmarked
• Independent nodal umbrella body to be set up for meeting testing and certification requirements

Mobilising Resources

• Data Centres and Energy Storage Systems to be given infrastructure status.
• Venture Capital and Private Equity invested more than Rs. 5.5 lakh crore last year facilitating one of the largest start-up and growth ecosystem Measures to be taken to help scale up this investment
• Blended funds to be promoted for sunrise sectors
• Sovereign Green Bonds to be issued for mobilizing resources for green infrastructure.

Leaders' views

Leaders from infrastructure and real estate segments have shared their views on the Budget proposals. Virendra D. Mhaiskar, Chairman & Managing Director, IRB Infrastructure Developers Ltd commented, “The announcement of 25,000 km highways network expansion with mobility of Rs 20,000 crores to complement public resources looks like a key initiative under sector. This will envisage ample opportunities for private players. The proposal to fund infrastructure through PM Gati Shakti, PPPs, etc. will mark escalation of economic prosperity.”

From cement industry perspective, Vishal Kanodia, Managing Director, Kanodia Group, said, “The various project development plans announced in the budget require huge quantity of cement and other construction materials and services. This will help the cement industry to increase in cement consumption as well as reduce their fixed cost.”

P B Balaji, Group CFO, Tata Motors, commented, “For the Indian automobile sector, which is a significant contributor to the nation's GDP, the budget offers continuity and also additional opportunities to drive multi-year growth. Specifically, the robust increase in capex by 35.4% to Rs 7.5 lakh crore and a comprehensive investment plan for infrastructure is a significant growth booster. Additionally, the launch of the well-conceived PM Gati Shakti program for multimodal transport including 100 cargo terminals and investments in 25,000 km of highways, apart from investments in ports and metros is an excellent development that will help create a world class transport infrastructure in the country.”

Agendra Kumar, Managing Director, Esri India, adds, “Through the emphasis on the Gati Shakti Master Plan in Budget 2022, the Government has reinforced its focus on infrastructure development. As a leader in the GIS domain, Esri India welcomes this step as we have multiple offerings for the  AEC sector. GIS technology has an important role in the construction industry. Esri's technologies like ArcGIS GeoBIM help planners, architects and designers in combining workflows of Autodesk's  BIM 360 (Building Information Modelling) with  Esri ArcGIS workflows to achieve higher efficiencies in designing, construction and management  of projects.”

(More comments and Budget analyses in the following pages.)

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