Budget 2018 impact on Infrastructure

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Published: February 2, 2018 3:39:09 AM

Budget 2018: The total capital outlay for the infrastructure sector has been budgeted to increase by 20.8% to Rs 5.97 lakh crore in FY18-19.

budget, Arun Jaitley, insurance companies, budget 2018 india, mutual funds, budget 2018 date, budget india, budget 2017 18, tax, budget line, budget highlights 2018, budget meaningBudget 2018: Apart from the core subsectors of Railways and Roads, the special focus of this Budget 2018 has been on rural infrastructure through development of rural roads, houses, sanitation, irrigation and water supply.(Image: Reuters)

Budget 2018: The total capital outlay for the infrastructure sector has been budgeted to increase by 20.8% to Rs 5.97 lakh crore in FY18-19. Apart from the core subsectors of Railways and Roads, the special focus of this Budget 2018 has been on rural infrastructure through development of rural roads, houses, sanitation, irrigation and water supply. To meet the target of Housing for All by 2022, the Budget announced construction of an additional 51 lakh houses in rural areas. Similarly, the capital outlay under PMAY (Urban) has been increased sharply, including assistance for construction of 37 lakh houses in urban areas. The Budget has laid emphasis on the completion of ongoing high-priority irrigation projects and increased allocation under PMKSY-AIBP.

Watch: Budget 2018: The story of the Budget briefcase | 5 things we bet you didn’t know

It also provided direction on the long-term projects being undertaken under the Smart Cities Mission and AMRUT programme. Of the 100 cities mandated for upgrade under the Smart Cities Mission, 99 have been selected so far. The programme would involve capital outlay of Rs 2.04 lakh crore (projects worth Rs 2,350 crore completed and works of Rs 20,852 crore under progress). Similarly, under AMRUT, state-level plans for providing water supply in 500 cities with a capex of Rs 77,640 crore have been approved.

A deepening of bond markets is required to support long-term infrastructure financing, especially given the twin challenges faced by banks of asset-liability management and increasing share of stressed assets. The relaxation of the rating threshold (from AA to A) would encourage more participation from domestic insurance companies and pension funds in the infrastructure sector.

Impact: PositiveJ

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