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The Future of Infrastructure Development Post Union Budget 2024?

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Finance Minister Shrimati Nirmala Sitharaman presented the Union Budget 2024-25 in Parliament today, her seventh consecutive budget in a row. This marked the inaugural budget of Prime Minister Narendra Modi's third term in office. The 2024 budget was anticipated to spotlight the government's strategic vision for achieving a 'Viksit Bharat' by 2047.

Introduction to Union Budget 2024 and Its Focus on Infrastructure

The infrastructure sector in India is like the superhero of the economy, swooping in to build world-class bridges, dams, roads, and more. India is on a transformative journey with initiatives to modernise transportation, upgrade urban areas, and expand digital infrastructure. Highways, railways, airports, waterways, and even ropeway systems are being developed to foster inclusive and sustainable growth.

The announcements focused on human resource development, infrastructure enhancements, and the creation of economic opportunities. These initiatives aim to transform the eastern region—comprising Bihar, Jharkhand, West Bengal, Odisha, and Andhra Pradesh—into a key driver for achieving Viksit Bharat.

Key Tourism Infrastructure Projects Announced in Union Budget 2024   

Union Budget 2024 laid the groundwork for some serious economic muscle, continuing the key initiatives from previous budgets. Under Tourism, the infrastructure development plans include:

  • The Vishnupad Temple Corridor and Mahabodhi Temple Corridor will be developed, modelled after the Kashi Vishwanath Temple Corridor
  • A comprehensive development initiative will be undertaken for Rajgir, a site of religious importance for Hindus, Buddhists, and Jains
  • Nalanda will be developed into a major tourist centre, with efforts to restore Nalanda University to its former glory
  • Odisha will receive support to enhance its scenic beauty, temples, monuments, craftsmanship, wildlife sanctuaries, natural landscapes, and pristine beaches, aiming to establish it as a premier tourism destination.

#BudgetSimpleHai

For a developing country like India, infrastructural development is crucial. Here’s what Finance Minister Shrimati Nirmala Sitharaman proposed in her Budget speech:

  • Over ₹11 lakh crore for infrastructure which is 3.4% of GDP
  • Phase IV of PMGSY to be launched
  • Focus on tourism infrastructure
  • Several schemes for both rural and urban development. 

 

To simplify this year’s Budget and to decode its impact on your life, your investment portfolio, and all that you do, we bring you #BudgetSimpleHai!


Join us on our website or head over to any of our social handles to get the latest updates on the Union Budget as it happens. Read in-depth reports, watch videos, and get a clear understanding of what’s in store.

 

Kyunki Bajaj Broking ke saath, #BudgetSimpleHai

Impact of Budget 2024 on Urban Infrastructure Development

The interim budget of 2024 announced an 11% increase in capital funding for infrastructure. This raised the expectations for urban infrastructure development. To support the same, the first full-year Union Budget laid today on 23 July 2024 announced a variety of urban infrastructure plans that are going to positively impact the growth and development in these areas. Here are a few urban infrastructure plans mentioned in the Union budget 2024-25.

  • Urban Development is one of the top Viksit Bharat budget priorities
  • Purvodaya: Vikas bhi Virasat bhi: For all-round inclusive development of the eastern region of the country. This includes the development of an industrial node at Gaya on the Amritsar-Kolkata Industrial corridor.
  • PM AWAS Yojana Urban: PM AWAS (U) saw an investment of ₹10 lakh crores to address the needs of 1 crore families in the next 5 years which will significantly help the landscape of urban housing.
  • Transit Oriented Development that plans for 14 large cities
  • Growth Hubs: For comprehensive and creative development of cities.
  • Street food hubs: The development of 100 weekly street food hubs with advancements of PM SVAnidhi to help street vendors in urban infrastructure.
  • Road & Infrastructure Connectivity: The budget announced 4 major road projects. Plus, it also announced that new airports, medical institutions and sports infrastructure are to be set up in Bihar for improved state development.

Rural Infrastructure Development Initiatives in Budget 2024  

India’s rural economy employs over 68% of the workforce but contributes less than half of the country’s GDP. As expected the FM, making rural infrastructure development a priority, proposed the following initiatives.

  • Infrastructure development including rural infrastructure is one of the priority areas announced in the government budget for 2024-25.
  • The government announced an allocation of ₹2.66 lakh crores for rural development.
  • New national Policy to be implemented soon for all-round development of the cooperative sector.
  • Policy to fast track growth of rural economy.
  • PM Janjatiya Unnat Gram to benefit 5 crore people by fostering the idea of inclusive development.
  • Expansion of bank branches in the northeast region to cover the untouched areas.
  • PM Gram Sadak Yojana to be implemented to offer all-weather connectivity to 25,000 rural households.
  • Assistance to Assam & Bihar infrastructure for flood management and other concerns.

Role of Public-Private Partnerships in Future Infrastructure Projects

PPPs play a crucial role in infrastructure development because of their innovative ideas and the efficiency they offer. Plus, they also help reduce the extra burden on public resources. Given how the Public Private Partnership helps the government divide the risk and resources, the budget announced the following schemes following the PPP model.

  • E-commerce export hubs to be set up in public-private partnerships to help traditional artisans.
  • Rental housing with dormitory-type accommodations for industrial workers.
  • Private public partnership for enhancement of nuclear energy capacity.
  • 800 MW commercial plant to be set up using AUSC technology.

Challenges and Potential Roadblocks in Infrastructure Development

The implementation of the provisions of the Union Budget 2024 is likely to experience few challenges, like:

  • Lack of sufficient and advanced infrastructural growth, especially in the rural areas
  • Limited access to digital services in various parts of the country
  • Limited dependence on digital work in comparison to the time-consuming paperwork.

Expert Opinions and Industry Reactions to Budget 2024  

The post-budget 2024 climate so far showcases a bitter-sweet reaction coming from the experts. There is a huge reliance placed on including infrastructural investments to amp up the portfolio of an investor. Going by the words of experts, here’s a list of key areas of focus:

  • Rural Development schemes will mark a considerable shift in the stock market.
  • Infrastructural Development, particularly in establishing colleges, medical institutes and highways in Bihar.
  • Commute connectivity to facilitate the golden quadrilateral project with 4 new projects to showcase positive changes, as expected. 
  • The E-commerce export hub is a futuristic vision that the budget has placed reliance on.
  • Street food hubs to promote street vendors is a reformatory approach that can bring opportunities for investors.

Conclusion   

The Finance Minister announced that the fiscal deficit has stood at 4.9% of GDP, with hopes of reducing it to below 4.5% in the financial year 2025-2026. Efforts are focused on improving fiscal discipline and managing expenditures to achieve this target, aiming to enhance economic stability and growth in the coming years. Despite the anticipation, financial experts commended the government on the fiscal discipline.

With a strong focus on infrastructure, Budget 2024 presents a promising outlook. Union Finance Minister Nirmala Sitharaman has prioritized both digital and physical infrastructure to spur growth and innovation, intending to reach a $130 billion industry by 2030. The infrastructure sector is hopeful that the 2024-25 Budget will further emphasize the digital economy, research and development, and the strengthening of the logistics sector, all aimed at propelling the nation towards a $7 trillion economy target.

Disclaimer: Investments in the securities market are subject to market risk, read all related documents carefully before investing. This content is for educational purposes only. Securities quoted are exemplary and not recommendatory.

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Frequently Asked Questions

What are the key infrastructure sectors expected to benefit from Union Budget 2024?

Answer Field

The Union Budget 2024-25 is expected to provide significant exposure to sectors like equity mutual funds, construction, steel, cement, and engineering. The capital expenditure on the mentioned sectors is expected to increase.

How will Union Budget 2024 impact urban infrastructure development?

Answer Field

The existing robust infrastructural growth is expected to continue with a projected expenditure of ₹143 lakh crore. Other advancements in the urban sector include the development of industrial parks to be developed in around 100 cities in India. 12 industrial parks are already sanctioned under the National Industrial Corridor Development Program.

What initiatives has the government announced for rural infrastructure in Budget 2024?

Answer Field

The Union Budget 2024-25 secures ₹2.66 lakh crore for rural development and infrastructure. Also, under the PM Awas Yojana, 3 crore new houses will be constructed, as mentioned by FM Nirmala Sitharaman!

How do public-private partnerships (PPPs) contribute to future infrastructure projects post-Budget 2024?

Answer Field

Public-private partnership projects are expected to benefit the infrastructural developments, given the budget mentioned, construction of an e-commerce export hub, increasing nuclear energy capacity, and setting up of an 80 MW commercial plant. The collaboration is only expected to bloom in the coming future.

What challenges might hinder infrastructure development despite Budget 2024 allocations?

Answer Field

One of the challenges to rural development can be the lack of essential and adequate infrastructure to facilitate service deliveries. Excessive paperwork increases the processing time of efficient public services. So, cutting on unnecessary paperwork could bring some positive impact. Apart from these, the lack of comprehensive digital access in rural areas could pose a challenge in developmental tasks. 

How are industry experts reacting to the infrastructure provisions in Budget 2024?

Answer Field

With infrastructure provisions laid out while keeping inclusive development in mind, industry experts are seeing the same in a positive light. Experts suggest that the infrastructure provisions with a focus on local and rural infrastructure, and domestic manufacturing will boost the manufacturing abilities of the country. 

What are the economic benefits of investing in infrastructure post-Union Budget 2024?

Answer Field

Infrastructure stocks will share significant opportunities with investors. Some of the crucial entities to invest could be

●        Siemens (order book of ₹47,000 crores)

●        Abb (order book of ₹8,400 crores)

●        Larsen & Toubro (L&T) (order book of 4.76 lakh crores)

●        Cummins, Bhel, Hitachi Energy (benefit in water and power infrastructure)

●        Tata Projects (construction sector)

●        Anant Raj (digital infrastructure)

●        Man infraconstruction and Tarc Ltd. (affordable housing schemes in rural areas)

●        KFC International, Skipper, and Kalpataru Projects (data centres, power transmission and distribution, semiconductor manufacturing)

●        Titagarh Wagons, BEML, Jupiter (electric locomotives and metro coaches). 

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