The budget saw promises of all kinds of infrastructure creation, including energy, healthcare, roads, railways, ports, among others, under the Rs 103 lakh crore National Infrastructure Pipeline (NIP) that covers over 6,500 projects.
But has there been enough budgetary allocation to fund these? Rajeshwar Burla, vice president, associate head-corporate ratings, ICRA, doesn’t think so. Says Burla, “[In the budget] the infrastructure allocations have been on a lower side, which was definitely a concern. Because the government has been talking about the NIP for quite some time, the investors were expecting some kind of funding roadmap from this budget, but that’s not what happened.”
The allocation towards the overall transport sector, including airport and railways, has increased by 9 percent to Rs 1.70 lakh crore, to fund, among others, the development of 100 more airports by 2024, doubling the air fleet from 600 to 1,200, more Tejas-type trains and the 148-km-long Bengaluru Suburban Project.
While Finance Minister Nirmala Sitharaman also spoke about accelerated development of highways and completion of Delhi-Mumbai Expressway and two other packages by 2023, the budget only saw the proposal to monetise at least 12 lots of highway bundles before 2024.
The indirect help with funding is likely to come through other fronts. 100 percent exemption of taxes will see a boost in funding from sovereign wealth funds looking for participation in the sector. This will also help boost investment from sovereign wealth funds in NHAI’s proposed InvIT planned for the current financial year. The exemption on Dividend Distribution Tax might also boost funding for infrastructure projects, but time will tell how it pans out for the same.