Introduction

During the budget announcement on February 1, 2023, the Union Minister of Finance and Corporate Affairs, Smt. Nirmala Sitharaman highlighted that India’s per capita income has doubled in around nine years, and the country’s economy is expanding so rapidly that it is set to become the fifth largest in the world. The same is in line with the vision for Amrit Kaal, namely: –

• Opportunities for citizens with a focus on youth
• Growth and Job Creation
• Strong and Stable Macro-Economic Environment

The term “Amrit Kaal” was coined by the honourable Prime Minister, Shri Narendra Modi for the first time on the occasion of India’s 75^th Independence Day in 2021. The same was done while unveiling the country’s plans for the next 25 years. The purpose of Amrit Kaal was to improve and enhance the citizens’ quality of life and bridge the gap between rural and urban areas. It also sought to embrace emerging technologies while minimizing government interference in the lives of the citizens. With this vision, the Prime Minister stated, “While India has achieved quick progress, there should be a ‘saturation’ of development and 100 percent achievement, with every hamlet having roads, every family having a bank account, and every eligible person having health insurance, a card, and a gas connection”.

Budget Implications on the Infrastructure Sector

In the budget speech, the Finance Minister also stated that the Budget 2023-24 will adopt seven major principles and priorities that would serve as “Saptarishi” for the next quarter-century, which is expected to serve as a guide through the Amrit Kaal. The Finance Minister further specified that the Government’s aim for this Budget 2023-24 includes a technology-driven and knowledge-based economy, as well as strong public finances and a thriving financial sector.

The seven areas that the Budget 2023-24 primarily focuses on include:

• Inclusive development
• Reaching the last mile
• Infrastructure and investment
• Unleashing the capacity
• Green growth
• Youth Force
• Financial sector

Under the ‘Saptrishi’ mantras, the Finance Minister outlined seven of the Union Budget’s top priorities for the year 2023, one of them being Infrastructure and Investments.

It is usually perceived that investments have a significant multiplier effect that enhances mobility, enables trade, development of employment opportunities, and increases the overall economic output. According to the Budget 2023-24, “Capital investment expenditure will climb by 33 percent to 10 lakh crore ($122 billion), or 3.3% of GDP, for the third consecutive year. This is about three times the expenditure in 2019-20”. This is likely to maintain financial stability and provide a buffer against global headwinds. This is also accompanied by a prolongation of the 50-year interest-free loan to state governments for another year, with a significantly increased expenditure of 1.3 lakh crore ($16 billion), to stimulate infrastructure investment and encourage state governments to take complementing policy initiatives.

To enhance opportunities for private infrastructure investment, the Budget 2023-24 envisages the creation of a new framework, the Infrastructure Finance Secretariat. The Infrastructure Finance Secretariat will aid all parties in their efforts to increase private investment in infrastructure, such as trains, highways, urban infrastructure, and power, which rely mostly on public funds. In addition, an expert committee will analyse the Harmonized Master List of Infrastructure to recommend the classification and finance system. The revitalization of fifty new airports, heliports, water aerodromes, and advanced landing fields is sought through the improvement of regional air connectivity. Further, one hundred essential transport infrastructure projects for last and first-mile connections for ports, coal, steel, fertiliser, and food grains industries have been identified to significantly boost India’s logistics sector.

These budget measures expand on the government’s National Infrastructure Pipeline (NIP) and other programmes, such as “Make in India” and the production-linked incentives (PLI) programme, to promote the expansion of the infrastructure industry.

Conclusion

The hike in capital expenditure by 33 percent to Rs. 10 lakh crore for infrastructure development for 2023-24 will certainly give a huge boost to the economy while increasing employment opportunities. There are positive strides in terms of the establishment of a finance secretariat that will in turn attract more private investment and the setting up of an expert committee will facilitate the appropriate classification of infrastructure and suitable financing framework. The Budget also takes infrastructure in Tier-2 and Tier-3 cities under its ambit by setting up an Urban Infrastructure Development Fund (UIDF) of Rs. 10,000 crore per year which will also promote innovation and reforms. The provisions created for metro and mass rapid transit system projects, sanitation, and urban housing look favourable for the growth of the country’s infrastructure. By reviving the infrastructure as well as facilitating infrastructure development in the future, the Budget significantly contributes to the economic growth and productivity of the country.