Budget 2023: FM increases budgetary support for roads and rail; defence, water find no mention

Nirmala Sitharaman with the Budget 2023 "bahi khata". (Image: ANI/Twitter)

The finance minister allocated more than Rs 5 trillion in budgetary support to two key infrastructure segments – roads and railways. Water and defence, however, did not find any mention in the minister’s budget speech on February 1.

Finance Minister Nirmala Sitharaman allocated budgetary support of Rs 2.40 trillion to the Ministry of Railways, up 51 percent from Rs 1.59 trillion allocated in revised numbers for the last year. “A capital outlay of Rs 2.40 lakh crore has been provided for the Railways. This highest ever outlay is about 9 times the outlay made in 2013-14," Sitharaman said in her speech.

It was yet another year of increased budgetary support for the roads sector. The finance minister announced a capital outlay of Rs 2.58 trillion for the Ministry of Road Transport and Highways (MORTH), up 38 percent from last year’s estimates. This is in line with what government sources had earlier indicated, saying additional budgetary support for roads is expected in order to meet the highway construction target of 25,000 km by the end of FY 2023-2024.

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The minister also announced enhanced financing measures for the infrastructure sector. “I have decided to continue the 50-year interest-free loan to state governments for one more year to spur investment in infrastructure and to incentivise them for complementary policy actions, with a significantly enhanced outlay of Rs 1.3 lakh crore,” Sitharaman said.

“Rail and roadways are the biggest beneficiaries of the enlarged outlay on capital expenditure for transport infrastructure, accounting for nearly Rs 5 lakh crore of the total Rs 10 lakh crore outlay, showing a continuous commitment. The Government recognises the possible issues in mobilising private capital in greenfield projects, thereby extending the outlay,” said Manish R Sharma, Partner and Leader of Capital Projects & Infrastructure, PwC India.

Gives water and defence a miss

The water sector found no mention in the minister’s budget speech, the capital allocation for the Jal Shakti ministry was at Rs 361 crore, down 14 percent from last year’s allocation. That apart, FM Sitharaman made no mention of last budget’s pitch for AtmaNirbharta( self-reliance) in defence. The Defence ministry’s capital outlay for FY24 is at Rs 1.71 Trillion, 7 percent up from last year’s outlay.