In the union budget 2024-2025 India prioritizes infrastructure development with a focus on maintaining strong central government investment alongside encouraging state and private sector participation. Recognizing its crucial role in driving economic growth and creating jobs, the multi-faceted strategy combines continued central government investment with measures to incentivize participation from states and the private sector.
The budget allocates ₹11,11,111 crore for capital expenditure on infrastructure, representing 3.4% of GDP. The state governments are encouraged to match their infrastructure spending levels based on their development priorities. A dedicated provision of ₹1.5 lakh crore has been set aside for long-term interest-free loans to support state resource allocation for infrastructure projects.
In addition to the above the budget has proposed to attract private investment in infrastructure through:
- Viability gap funding: This bridges the gap between project cost and revenue, making projects more attractive to private investors.
- Enabling policies and regulations: Streamlining regulations will make it easier for private companies to invest in infrastructure.
- Market-based financing framework: This framework will be developed to facilitate private sector funding for infrastructure projects.
Further, through the proposed implementation of phase IV of the Pradhan Mantri Gram Sadak Yojana (PMGSY) it is aimed to provide all-weather road connectivity to 25,000 additional rural habitations that have grown in population.
This multi-pronged approach aims to accelerate infrastructure development across the country, with a particular focus on bridging the rural-urban divide. Increased investment in infrastructure is expected to create jobs, boost economic activity, and improve the overall quality of life for citizens.
We expect the government to lay down policies for effective implementation of the above.
