For key infrastructure sectors, the Union Budget 2024 is par for the course

The Centre wants to undertake infrastructure development with states in tow.

The full Union Budget for this fiscal was business as usual on the infrastructure front, sending a subtle message that the private sector should step up investments in the infrastructure buildout, while the government takes a pause.

While this could be the intended outcome, there was no definite call-out in the budget.

Further, surprisingly, there was little to no mention on monetisation of infrastructure assets, which has gained traction in recent years.

The overall budget outlay was unchanged, at Rs 11.11 lakh crore, for fiscal 2025.

The Centre wants to undertake infrastructure development with states in tow. It gave significant attention to cities to tackle the rapid urbanisation across the country.

For the manufacturing sector, good-quality plug and play infrastructure is a key requirement to set up facilities.

The announcement to develop industrial parks in 100 cities, in partnership with states and the private sector, will promote regional manufacturing and job creation in the medium term.

In addition, the Centre proposed to develop 12 industrial parks on its own. That said, it is imperative to develop these parks at scale and provide necessary external infrastructure such as good-quality roads and inland container depots in a timely manner.

The budget also proposed to develop cities as growth hubs, introduce a transit-oriented development scheme, and carry out brownfield development of cities to help create jobs and develop all-round economic activity around these cities.

For the roads and railways sectors, the budget maintained the status quo on capital expenditure. This turns the focus towards execution.

With awards of new projects taking a pause for the roads sector in the first four months this fiscal, a flurry of activity is expected in the rest of the fiscal.

Railways is expected to see a 7 percent increase in revenue receipts, taking the budgetary estimate to Rs 2.78 lakh crore, which will help improve its operating ratio.

In shipping, the focus has been on improving gross tonnage of Indian flag carriers. We account for only about 5 percent of total overseas cargo carrying requirements of India. Hence, focused reforms for the sector were very much needed.

Further, promotion of cruise tourism by introducing a simpler tax regime for foreign carriers and completely removing the customs duty on components and consumables for the manufacture of shipping vessels will support the Indian ship-building industry.

The budget did not touch upon monetisation of brownfield assets and a road map for attracting private-sector investments. On the brighter side, the budget has brought down the time for classification of units as LTCG from 36 months to 12 months, this will give good fillip to this mode of monetisation of built assets.

On the softer side, the focus on skilling programme and creation of 1,000 Industrial Training Institutes will aid the infrastructure sector, as skilled labourers will be available locally.

To sum up, the budget is a continuum with respect to allocation to key infrastructure sectors, albeit with a lower allocation in percentage terms.