UnionBudget 2023-24: The global economy, battered with Covid pandemic as well as Russia-Ukraine war, seems to be plummeting into recession followed by awful layoffs in major tech companies that could potentially exacerbate the woeful situation of supply-demand mismatch. The interest-rate hikes by US federal reserve and other major central banks in order to cool down northward inflation have dampened the spirit of consumer spending throwing the disrupted supply-demand chain further from frying pan to the fire. Speculation is rife, as experts suggest, that there is a 50 per cent chance of global recession in 2023 and 75 per cent chance of it happening in the next two years.
Public expenditure to push demands
Despite multiple economic shocks in the past, India has relatively done well to tackle the recessionary situation by dint of its large and diversified sectoral orientation of the economy — some sectors doing well despite others in poor light. Having been reeled under pre-pandemic sluggish economy, Covid hit growth contraction and K-shaped recovery, India looks sanguine to ensure global headwinds do not take a toll on its economy. Finance Minister Nirmala Sitharaman, in her fifth budget due to be presented tomorrow (Wednesday), seems to have braced up for a fresh boost for the capital expenditure on infrastructure — especially for sectors such as roads and railways. The public expenditure by the government will generate demands like cement and steel among other things as well as create job opportunities, which will spur the growth of the economy.
The Modi-led ruling establishment has been rapidly ramping up transportation such as highways and railways since 2015. The Railway Budget was jacked up from Rs 55,000 crore in 2017 to Rs 1.4 lakh crore in 2022. The budget allocation for Roads and Highways zoomed past from Rs 64,900 crore in 2017 to Rs 1.99 Lakh crore in 2022.
Road connectivity criss-crossing India
A boost to strong road network and highways infrastructure is essential for the growth of the economy as it will enhance seamless connectivity as well as create job opportunities. The Ministry of Road Transport and Highways has spent significantly in the past few years. According to the government data, the compounded annual growth rate (CAGR) of the actual expenditure was 15 percent between 2011-12 and 2016-17. The CAGR stands at 20 percent for the period of 2016-17 to 2021-22.
As the government aims at higher road monetisation goals, Budget 2023 is expected to augment road connectivity across India.
As per the PTI report, India built only 4,000 kilometres of national highways between 1950 and 2015, which was extended to 77,000 kilometres in 2015. However the highway length is on its extension course, which is set to cross 1.8 lakh kilometres by 2025.
Ramping up Railways modernisation
The allocation of railways was lower than that of roads-highways in the previous budget. Experts are of the view that there may be an increase in budgetary allocation for Indian Railways. Keeping in view the requirement to achieve the National Rail Plan Vision, the allocation for Railways is expected to increase in the financial year 2024. The Modi government has stressed on modernisation of railway stations and upgrade of railway tracks.
India had only 10,000 kilometres of railway lines in 1950, which extended to 63,000 kilometres in 2015. As per PTI report, the rail lines network could touch 1.2 lakh kilometres in 2025. Laying new tracks, increasing the numbers of Vande Bharat trains, hydrogen-powered trains, replacing conventional coaches, multitracking and signalling upgrades in congested routes, redeveloping infrastructure of more than 1000 railway stations under the AMRUT Bharat Station Scheme, and Ahmedabad – Mumbai bullet train project will remain key points for the coming budget and Indian Railways.