EMPHASIS on BUILDING INFRASTRUCTURE

The Union Budget for the FY 2022-23, building on the previous two budgets, provides a huge impetus to the country's infrastructure. With two years of pandemic and varied disruptions caused, our Hon'ble Finance Minister has delivered a budget speech with an emphasis on building infrastructure which is extremely critical to economic growth.

In 2021, the Government of India released the National Monetization Pipeline (NMP), a four-year pipeline unlocking value in brownfield assets and offering them to the private sector transferring the revenue rights with no ownership. How will this revenue help? The revenue generated from the monetization of this $81B pipeline will be used to develop the infrastructure in India and hence the same is co-terminus with the National Infrastructure Pipeline to be developed by 2025.

Towards world-class infrastructure

Emphasizing the growth, Hon'ble FM also elaborated on PM Gati Shakti plan launched to develop world-class infrastructure; a transformative approach to bring all the seven engines namely - Roads, Railways, Airports, Ports, Mass Transport, Waterways, and Logistics Infrastructure together for sustainable development. Further, Gati Shakti also envisages states to participate in the program, an additional Rs 1-lakh crore support is also tied to reforms in urban infra regime, while also restricting the creation of assets like airports in a far-flung place without adequate connectivity.

In Railways, the Finance Minister said that 'One Station-One Product' concept will be launched to help local businesses and supply chains. Moreover, as a part of Atmanirbhar Bharat, 2,000 km of network will be brought under Kavach, the indigenous world-class technology for safety and capacity augmentation in 2022-23. Also, 400 Vande Bharat trains and 100 PM GatiShakti Cargo Terminals for multimodal logistics facilities are to be built over next three years.

Further, under the Roads sector, the national highways network will be expanded by 25,000 km in 2022-23 in addition to the existing network of 1.4 lakh km and Rs 20,000 crore will be mobilized through innovative ways of financing to complement the public resources by monetizing highways during 2022-23, compared to Rs 13,000 crore during the current fiscal. Further, Multimodal Logistics Parks at four locations through Public-Private Partnership (PPP) mode will be awarded in 2022-23.

Human empowerment

Since 2014, the government's focus has been on the empowerment of citizens, especially the poor and the marginalized and measures have been taken to provide housing, electricity, cooking gas, and access to water. In 2022-23, 80 lakh houses will be completed for the identified eligible beneficiaries of PM Awas Yojana, both rural and urban and Rs 48,000 crore is allocated for this purpose.

National Ropeways Development Programme will be taken up on PPP mode and contracts for 8 ropeway projects for a length of 60 km will be awarded in 2022-23.This programme is aimed at improving connectivity and promoting tourism. It is also expected to cover congested areas where a conventional mass transit system is not possible. This will be institutionalized under the Road Transport Ministry.

Self-reliance in defence

It is also the vision of the Finance Minister to reduce reliance on imports and promote self-reliance in equipment for the armed force. The defence budget has been increased to Rs 5.25 lakh crore for 2022-23 from Rs 4.78 lakh crore in 2021-22 with a major push on procurement of weapons and military platforms from domestic manufacturers. Out of the total defence procurement, 25% will be allocated and spent on research and development in collaboration with private sector and 68% on defence procurement through the domestic industry. Private industry will be encouraged to take up design and development of military platforms and equipment in collaboration with DRDO and other organizations through SPV (special purpose vehicle) model.

There has been an increase of 9.8% for defence pensions as compared to last year. Further, there has been an allocation for purchase of new weapons, aircraft, warships and other military hardware.

Concluding note

This budget has truly been a step forward for the augmentation of infrastructure. A coordinated approach to achieve targets set for infrastructure and coordination between all the allocations through Gati Shakti Master Plan. This will continue to provide supply side impetus and hence will help in achieving the ultimate goal of Atmanirbhar Bharat.

- Himani Goel

Principal Investment Specialist Invest India

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