In the Interim Budget 2024, the government announced an 11% increase in capital expenditure (capex) for the fiscal year 2024-25, raising the allocation to Rs 11.11 lakh crore. The allocation is double what was allocated 10 years ago, but is it enough? With general elections over and the BJP back in power, will the government consider increasing the allocation further to drive the economic development of the country?
Infrastructure Growth Prospects
The enhanced capex allocated in February is expected to spur infrastructure growth across various sectors, including transport, energy, and urban development. The allocation aims to modernise the country’s infrastructure, improve connectivity, and stimulate economic activities, particularly in rural and underdeveloped regions. Projects in railways, highways, ports, and urban transport are likely to receive a substantial portion of this funding, driving the country towards a more robust and efficient infrastructure network.
Challenges and Needs
The government’s capex plan must address several pressing needs:
Modernization of Railways: Upgrading tracks, signaling systems, and rolling stock is crucial for improving efficiency and safety.
Highway Development: Completing ongoing highway projects and initiating new ones, especially in remote and border areas, is essential.
Urban Transport Solutions: Developing efficient public transport networks and incorporating sustainable transport options will reduce urban congestion and pollution.
Port and Maritime Infrastructure: Improving port infrastructure and enhancing coastal shipping and inland waterways are vital for trade and commerce.
Air Connectivity: Upgrading airport infrastructure and enhancing regional connectivity are necessary to accommodate the increasing air traffic.
Logistics and Warehousing: Developing integrated logistics parks and improving cold chain infrastructure will streamline supply chains and reduce costs.
Conclusion
The Interim Budget 2024’s capex increase to Rs 11.11 lakh crore is a step in the right direction for infrastructure development. However, given the extensive needs of the sector, it may not be sufficient to fully address the challenges. A more substantial increase could have provided the necessary impetus for comprehensive infrastructure growth, ensuring that India remains on a path of sustained economic development. As the government prepares for the full Budget, the focus on infrastructure will remain a significant question.