Union Budget 2023: Infra capital investment increased by 33 per cent; private investment to be increased

Today’s budget presented by the Finance Minister was centred around youth, education, health, and business. The focus on infrastructure, railway, road, and highway was considerably low. The finance minister announced that the capital investment outlay is being increased by 33 per cent to Rs 10 lakh crore, which would be 3.3 per cent of GDP. This will be almost three times the outlay in 2019-20.

Upper Bhadra Project

Sitharaman announced in the budget that Rs 5,300 will be given to the Upper Bhadra Project in Karnataka, which will provide sustainable micro irrigation and fill up surface tanks for drinking water.

Private investment

After the subdued period of the pandemic, private investments have started increasing again and in order to assist all stakeholders get more investments the role of the Infrastructure Finance Secretariat was established. The role is to help increase private investment in infrastructure, including roads, urban infrastructure, power, and railways. The finance minister also added that an expert committee will review the Harmonized Master List of Infrastructure for the purpose of recommending the classification and financing framework suitable for Amrit Kaal.

For better connectivity of ports, the government has identified one hundred critical transport infrastructure projects for ports, coal, steel, fertiliser, and food grain sectors. These projects will be taken up on priority with investment of Rs 75,000 crore. From this investment, Rs 15,000 crore will come from private sources.

Additional infra for air connectivity

The government also announced that fifty additional airports, heliports, water aerodromes and advance landing grounds will be revived for improving regional air connectivity.

Urban Planning

States and cities have been asked to undertake urban planning reforms to transform the cities into ‘sustainable cities of tomorrow’. The government also plans to incentivize cities to improve their creditworthiness for municipal bonds.

An Urban Infrastructure Development Fund (UIDF) similar to RIDF will be established through use of priority sector lending shortfall. This UIDF will be used by public agencies to create urban infrastructure in Tier 2 and Tier 3 cities and managed by the National Housing Bank. States have been asked to leverage resources from the grants and existing schemes to adopt appropriate user charges while accessing the UIDF. For this, the finance minister plans to provide Rs 10,000 crore per annum.

Budget 2022-23

In 2022–23, the Ministry of Road Transport and Highways was allocated nearly Rs 68,000 crore, making it the highest increase among all ministries in 2022-23. Most of the allocated funds were earmarked for investment in the National Highways Authority of India (NHAI). In the last budget, Gati Shakti Master Plan was also formulated to support the operational timeline, coordinate all spending on multi-modal connectivity projects.

In 2022–23, capital expenditure was estimated at Rs 1,87,744 crore, a 35.4 per cent increase in the outlay, and revenue expenditure was estimated at Rs 11,364 crore.