The election year budget was specially tailored to boost infrastructure and real estate. This is clearly evident from the allocation of 3.4 percent of GDP (up from 2 percent a year ago) to targeted initiatives of infrastructure and connectivity. The 11.1 percent increase in capital outlay for infrastructure demonstrates the government’s commitment to push infrastructure which in turn will boost the real estate sector.
The interim railway budget for 2024-25 saw 5.8 percent increase to Rs 2.55 lakh crore. The road, transport and highway sector got an allocation of Rs 278000 crore, a 2.7 percent hike, aimed at attracting private sector investment through new projects in BOT and PPP mode. For the power sector, the hiked allocation of Rs 28352 crore was up 50 percent from the revised estimate of Rs 18945 crore in 2023-24. The green power budgetary allocation saw a significant increase of 110 percent at Rs 10000 crore.
The government’s capex is projected to increase to Rs 11 trillion in 2024-25 – almost 4.5 times the level in 2014-15. According to the Finance Ministry, this substantial increase in capex is in line with the government’s efforts to boost growth potential , job creation, private investments and provide a cushion against global headwinds. The capex of the state governments, has collectively shown an upward trend- from 3,2 percent of GDP in FY12 to around 4.4 percent in FY 23.
The polls have proved to be a boon for infrastructure development by putting it on a fast track. Infrastructure and urban development projects worth Rs 10 trillion were inaugurated in less than 3 months of 2024. In the energy sector, projects worth Rs 1.62 trillion were inaugurated across multiple states.
Betting big on infrastructure development as a key to economic development, the Modi government has been pitching for modernising railways with Vande Bharat trains, focusing on railway safety and redevelopment of over 1300 railway stations at an expense of Rs 24000 crore. Besides, the Railways Ministry is targeting to deliver more semi high speed and high speed rail lines over the next 5 years.
Before the poll dates were announced and model code of conduct kicked off , the Railways Ministry went on project launching spree , serving as a big booster to ‘Viksit Bharat, Viksit Railway’ programme aimed at upgrading rail network and railway stations. Railway projects worth Rs 85000 crore were launched including 10 new Vande Bharat train services. As many as 51 Gati Shakti Multi-modal Cargo Terminals , doubling/multitracking and gauge conversion of 1500 km railway lines , electrification of 2135 km rail line section and 401 km section of Eastern Dedicated Freight Corridor and 244 km corridor of Western Dedicated Freight Corridor, were dedicated to the nation.
From 0 km between 2004-14, over 2500 km of dedicated freight corridors have already been commissioned. These corridors are a key to reducing the cost of logistics . The speed of freight trains has more than doubled. Faster coal trains on DFC are reducing inventory cost and increasing power security. Besides, international markets are now accessible to people of Northern India via ports of Western India. The shifting of freight trains to DFCs are set to augment passenger train capacity. In a pre-poll boost, India’s first automobile inplant railway sliding at Suzuki Motor in Ahmedabad dedicated to nation, would allow transportation of 300000 cars annually via railways and the plant would cut 50000 truck trips annually.
Rail connectivity also got a boost through RRTS and Metro rail. The 17 km long second corridor of 82 km Rs 30270 crore Delhi- Meerut RRTS was flagged off. NCR is going to get a big connectivity boost with this project as RRTS railway stations are to be integrated with airports, railway stations, metro stations, ISBTs and bus stops to create a network of public transit system leading to balanced development in areas around Delhi. The pre- poll push to infrastructure connectivity also saw metro projects worth Rs 15400 crore dedicated to nation by PM Modi. These included a 29 km long Rs 5452 crore Gurgaon metro rail extension from Millennium City Metro Station to Cyber Hub Metro Station. It will provide connectivity boost to Dwarka Expressway. Besides the metro extension to Dwarka Sector 21, will improve connectivity to IGIA.
The new road/highway constructions are being put on the fast track mode with the government targeting to launch 12000-13000 km of highways in FY 24. The capacity augmentation and widening of existing highways to 4 lanes is also set to reach a record high. In a poll push, Modi government inaugurated and laid the foundation stone of 112 road and highway projects with a total investment of Rs 1 trillion.
These included inauguration of Haryana section of the flagship infra project under Bharatmala- the Rs 10000 crore Dwarka Expressway- the longest elevated urban road in India.In Uttar Pradesh, 1000 acres of land near expressways has been acquired to facilitate PSUs to set up industrial plants. According to Manoj Kumar Singh, Infrastructure and Industrial Development Commissioner of Uttar Pradesh Expressways Industrial Development Authority (UPEIDA) has notified about 30 nodes of different eway projects for land acquisition to ease the availability of affordable land to industrialists, besides offering them an array of incentives on capital investment. Four Eways – Yamuna Eway, Agra-Lucknow Eway, Purvanchal Eway, Bundelkhand Eway are already functional in U.P and 595 km Ganga Expressway project will be completed by December 2024.
The road infrastructure at the borders is being given a big thrust. The Rs 825 crore twin lane Sela tunnel project, strategically located close to LAC in Arunachal Pradesh and built by Border Roads Organization (BRO), has been dedicated to nation. The Road Transport & Highway Ministry has sanctioned around 16000 crore for construction of over 600 km of 1748 km frontier highway in Arunachal Pradesh to improve connectivity and infrastructure along the border. The BRO has completed 330 infrastructure projects at a cost of Rs 8737 crore over the last three years and currently 10 tunnels are being constructed and another 18 are planned. In North-East, in all urban development projects worth Rs 55000 projects were either dedicated to nation or their foundation laying was done.
On the air infrastructure connectivity front, projects worth Rs 34000 crore have been inaugurated and foundation stones laid.PM Modi greenlighted 15 airport projects , 3 new airports in Uttar Pradesh , 12 new terminals including Delhi, Lucknow and Pune to handle 62m passengers annually . The regional air connectivity has been given a big push by inaugurating new airports at Aligarh, Azamgarh, Chitrakoot, Moradabad and Shravasti in Uttar Pradesh .The foundation stone laying of new airport terminal buildings was done at Kadapa, Hubballi and Belagavi with combined capacity of 95 lakh passengers annually. There has been inauguration of new/upgraded airport terminal buildings of Gwalior, Adampur, Kolhapur, Jabalpur, Lucknow ,besides Delhi and Pune with combined capacity to serve more than 6 crore passengers annually.
The power infrastructure is also being fast tracked . The foundation stone for 630 mw project costing Rs 3200 crore has been laid in Madhya Pradesh with the addition of around 3000 substations and upgradation of 4000 substations boosting the availability of power for over 22 hours in rural areas and 23 hours in urban areas. About 85 GW of thermal capacity is being added and 14 GW of hydro projects are under construction with another 14-15 GW under clearance. In the last 10 years 190 GW power generation capacity has been added , taking it to 436 GW. During this period, 200000 circuit km transmission lines have been added, making it the largest such integration system in the world. The investments worth Rs 17 lakh crore are being lined up over the next 5-7 years while investments of Rs 20 lakh crore have already been made.
The government’s offensive on infrastructure development front, has also contributed to speedy project executions. In February, the share of delayed central projects stood at 25-month low at 41.2 percent in February 2024 from 42.8 percent in January 2024. With elections approaching fast, it remains to be seen what dividends the Modi government will get from the voters for its urban development poll push.
(The article was published on Indiancentury.in on April 15, 2024 and has been reproduced here)
