A Sustained Thrust

Though the Union Budget does not explode a big-ticket bomb in infrastructure this year, each of its big sectors-railways, highways, housing, industry, urban planning-gets an adequate push

- AVISHEK G. DASTIDAR

IN PREVIOUS TERMS, THE NARENDRA MODI GOVERNMENT FOCUSED on building infrastructure to improve connectivity, reduce logistics costs and enhance India’s business environment. This thrust continues, though without major new announcements, in this year’s budget. Make no mistake. At Rs 11.11 lakh crore, the estimated capital expenditure is still some 3.4 per cent of the GDP. But it’s a modest 11 per cent increase from last budget’s Rs 10 lakh crore. Then, finance minister Nirmala Sitharaman had steeply increased the capital investment outlay by 33 per cent to Rs 10 lakh crore—3.3 per cent of the GDP. That was almost three times the 2019-20 figures. Indeed, after 10 years of keeping infrastructure at the centre of its spending plans— with provisions for new highways, rail projects and airports—the Centre has almost downplayed it. “Why fix something that’s not broken?” explains Bibek Debroy, chairman of the Prime Minister’s Economic Advisory Council. “Sectors like highways and railways are success stories. And they have hugely expanded their capacity to absorb capital spend over the years.”

In her budget speech, Sitharaman, too, resolved “to maintain strong fiscal support for infrastructure”. To give a fillip to states in building infrastructure, the Centre has kept a provision of Rs 1.5 lakh crore for long-term interest-free loans. Additionally, private investment in infrastructure will be promoted through viability gap funding and supportive policies.