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Budget 2023: Capital outlay sees 33% hike in infra boost. Focus on Nal Se Jal, PM Awas scheme

Highways sector also saw jump in allocation. Fifty airports, heliports, water aerodromes & advance landing grounds to be revived to improve regional air connectivity.

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New Delhi: The Modi government’s infrastructure push — highways, airports, housing for poor, drinking water — has continued in budget 2023-24, with finance minister Nirmala Sitharaman increasing the capital expenditure (capex) outlay to Rs 10 lakh crore, a 33 per cent hike as compared to last fiscal. The capex allocation in last year budget was Rs 7.5 lakh crore.

“(This overall outlay) would be 3.3 per cent of GDP, almost three times the outlay made in 2019-20. With the substantial increase, it is central to the government’s efforts to enhance growth potential and job creation, the crowd in private investments and provide a cushion against global headwinds,” Sitharaman said in her Budget speech Wednesday.

Ahead of elections to nine states scheduled this year and the Lok Sabha elections in 2024, Sitharaman increased the outlay on welfare projects for the poor, including PM Awas Yojana, the housing scheme for the rural and urban poor, and Nal Se Jal scheme, which aims to provide potable drinking water to every rural household. 

Karnataka, Madhya Pradesh, Rajasthan, Chhattisgarh, Telangana, Meghalaya, Mizoram, Nagaland and Tripura are scheduled to go to polls this year.

The overall outlay for PM Awas Yojana was increased to Rs 79,000 crore from Rs 48,708 crore allocated in the 2022-23 budget estimate (BE). However, if one compares the 2023-24 PMAY outlay to the 2022-23 revised budget (actual spending), which was Rs 77,130 crore, the actual hike is not much.

Jal Jeevan Mission (JJM), under which the government’s flagship Har Ghar Jal scheme to provide potable drinking water to every rural household comes, also saw a jump in allocation.

An outlay of Rs 70,000 crore has been earmarked for the drinking water programme in 2023-23, up from Rs 60,000 crore in 2022-23 BE. The actual spending, however, was Rs 55,000 crore in the 2022-23 revised estimate (RE).

For enhancing opportunities for private investment in infrastructure, Sitharaman said that the newly established Infrastructure Finance Secretariat will assist all stakeholders for more private investment in infrastructure, including railways, roads, urban infrastructure and power, which are predominantly dependent on public resources.

Also Read: Budget 2023: Health allocation puts focus on pharma research, collaborative R&D at ICMR labs

Transport & urban infrastructure get a leg up

Sitharaman also announced that 100 critical transport infrastructure projects, for last and first mile connectivity for ports, coal, steel, fertilizer, and food grains sectors have been identified. “They will be taken up on priority with investment of Rs 75,000 crore, including Rs 15,000 crore from private sources,” the finance minister said.

The highways sector also saw a jump in allocation — from Rs 1.9 lakh crore in 2022-23 BE to Rs 2.7 lakh crore in BE 2023-24.  

The highways ministry has a slew of big ticket projects underway including Bharatmala Pariyojna and 27 greenfield expressway projects including Delhi-Mumbai & Bengaluru-Chennai expressway. These will require a steady flow of funds.

In the current fiscal, 5,400 km of national highways have been constructed till December 2023 while contracts have been awarded for constructing 5,350 km of highways, a senior official in the highways ministry told thePrint.

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

The sector experts have welcomed the boost. Jagannarayan Padmanabhan, director, CRISIL Market Intelligence & Analytics said, “From an infrastructure standpoint, this is an expansionary budget. The focus is on maintaining continuity and visibility in government spend, allocating to ministries that will have short- and medium-term impact and have the ability to spend, i.e. the transport sectors, crowding in private sector investments by having these continued expenditure, and incentivising state governments to commit to expenditure in the coming fiscal.”

For the urban sector, Sitharaman announced the setting up of the Rs 10,000 crore Urban Infrastructure Development Fund (UIDF), which will be established through use of priority sector lending shortfall.

“This will be managed by the National Housing Bank, and will be used by public agencies to create urban infrastructure in Tier 2 and Tier 3 cities. States will be encouraged to leverage resources from the grants of the 15th Finance Commission, as well as existing schemes, to adopt appropriate user charges while accessing the UIDF. We expect to make available Rs 10,000 crore per annum for this purpose,” Sitharaman said. 

The finance minister also announced that all cities and towns will be enabled for 100% transition of sewers and septic tanks from manhole to machine hole mode, a move that will put an end to the practice of manual scavenging. 

In December 2022,  Union Minister Ramdas Athawale informed Parliament that as many as 400 people had died while cleaning sewers and septic tanks since 2017

(Edited by Anumeha Saxena)

Also Read: Budget 2023: Eye on polls, Modi govt allots Rs 15,000 cr for tribal development — 5x hike


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