Breaking Down the 2024 Budget: Key Allocations for Infrastructure and Road Construction
Category : Real Estate Sector
Blog posted by : Admin / 09 Aug, 2024
As India gears up for its next phase of growth, the Union Budget 2024 spotlights infrastructure and road construction. These sectors are the backbone of India's development, connecting cities, boosting trade, and creating jobs nationwide.
From expressways linking major cities to rural roads reaching remote villages, the budget 2024 infrastructure aims to accelerate India's infrastructure development. In this article, we'll break down the key allocations for these vital areas, helping you understand how they might shape India's future. Read along!
Key Highlights
The Union Budget 2024-2025, presented by Finance Minister Nirmala Sitharaman, strongly emphasizes infrastructure development as a critical driver of India's economic growth. Here are the key highlights of the budget 2024 infrastructure sector:
Economic Growth Projections
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The Construction Budget 2024 allocates ₹11,11,111 crore for capital expenditure, representing 3.4% of India's GDP.
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The central government has provided ₹1.5 lakh crore in long-term, interest-free loans to states for infrastructure projects
Major Sectors Receiving Funding
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The launch of Phase IV of the Pradhan Mantri Gram Sadak Yojana (PMGSY) will focus on providing all-weather road connectivity to 25,000 rural habitations.
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More cities will receive Namo Bharat (a new branding for rapid transit systems) and Metro Rail infrastructure projects.
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Specific allocations have been made for flood and landslide-affected states.
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Financial support for major irrigation projects, such as the Kosi-Mechi link in Bihar, is estimated at ₹11,500 crore.
Objectives for Infrastructure Development
One of the primary objectives of the 2024 Budget is to maintain solid fiscal support for India’s infrastructure development over the next five years. To achieve this, the government has introduced several key initiatives, including:
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State-level infrastructure support: The budget 2024 construction allocates ₹1.5 lakh crore for long-term interest-free loans to states. This move aims to encourage states to match the central government's efforts in infrastructure development, ensuring a coordinated approach across the country.
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Private sector engagement: A new market-based financing framework will be introduced to facilitate public-private partnerships, potentially unlocking additional resources for large-scale projects.
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Rural connectivity: The launch of Phase IV of the PMGSY aims to provide all-weather road connectivity to 25,000 rural habitations.
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Disaster management and flood mitigation: The budget 2024 infrastructure recognizes the importance of building resilient infrastructure in disaster-prone areas. Specific allocations have been made for flood and landslide-affected states:
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Bihar will receive funding for the Kosi-Mechi intra-state link project, estimated at ₹11,500 crore.
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Assam will get assistance for flood management projects related to the Brahmaputra River.
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Himachal Pradesh, Uttarakhand, and Sikkim will receive aid for reconstruction and rehabilitation following recent natural disasters.
Infrastructure Allocations
The government has earmarked a massive Rs 11.11 lakh crore, continuing its focus on capital expenditure.
Key Infrastructure Projects
The budget 2024 infrastructure aims to focus on projects such as:
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PM Gati Shakti National Master Plan: This ambitious initiative aims to improve multimodal connectivity nationwide. The Construction Budget 2024 supports states undertaking infrastructure projects under this plan, potentially through interest subsidies.
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Bharatmala Pariyojana: This flagship highway development program continues to receive support, focusing on expanding and improving the national highway network.
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Pradhan Mantri Gram Sadak Yojana: The budget 2024 infrastructure announces the launch of Phase IV of PMGSY, which aims to provide all-weather connectivity to 25,000 rural households.
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High-Speed Rail Corridors: The Construction Budget 2024 supports expanding and completing projects like Vande Bharat and Bullet Trains, enhancing inter-city connectivity.
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UDAN (Ude Desh Ka Aam Nagrik) Scheme: This initiative focuses on expanding airport infrastructure and enhancing air connectivity to Tier-II and Tier-III cities.
Sector-wise Distribution
Now, let’s talk about which sector received what infrastructure bill budget allocation:
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The Ministry of Road Transport and Highways receives an allocation of Rs 2.78 lakh crore, a 2.8% increase from the previous year.
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A substantial Rs 2.52 lakh crore is allocated to the railway sector, marking a 5.8% increase from the previous fiscal year.
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The budget 2024 construction introduces the Urban Infrastructure Development Fund (UIDF) to address infrastructure gaps in urban areas.
Road Construction Allocations
While the allocation for the Ministry of Road Transport and Highways (MoRTH) remains unchanged from the interim budget, it represents a modest increase from the previous fiscal year. This steady investment in India’s road construction budget aims to address past shortfalls and accelerate the pace of highway development across India.
Total Allocation for Road Construction
The budget allocates Rs 2.78 lakh crore to MoRTH for the fiscal year 2024-2025, marking a 3% increase from the previous year. This substantial investment underscores the government's prioritization of road infrastructure as a key driver of economic development.
Within this allocation, the National Highways Authority of India (NHAI) receives Rs 1.68 lakh crore, a 3.9% increase from 2023-24. This boost in funding supports the NHAI's ambitious highway construction targets and improves its financial health.
Key Infrastructure Projects
While specific new projects are not highlighted in the budget, the allocation supports ongoing initiatives and ambitious targets:
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National Highways Development: The government aims to construct 13,800 km of highways in 2024-25, building upon the 12,349 km completed in 2023-24.
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Bharatmala Pariyojana: This flagship program, targeting the development of 65,000 km of national highways, continues to be a priority.
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Expressway Development: The budget 2024 infrastructure supports the ongoing construction of expressways to enhance inter-city connectivity and reduce travel times.
Financing and Implementation Strategies
The funding sources behind the budgetary allocation to the infrastructure sector include:
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Government Allocation: The primary source of funding is the substantial government allocation of Rs 11.11 lakh crore for infrastructure development.
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State Support: The budget 2024 infrastructure encourages states to provide similar-scale support for infrastructure, aligning with their development priorities.
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Long-term Interest-free Loans: A provision of Rs 1.5 lakh crore for long-term interest-free loans has been made to assist states in their resource allocation.
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Market-based Financing: A new market-based financing framework is to be introduced, potentially opening up additional funding avenues.
Expected Outcomes and Long-term Benefits
The Union Budget 2024-2025 presents a comprehensive approach to infrastructure development, focusing on the consolidation and enhancement of existing projects rather than introducing new initiatives. Let's explore the expected outcomes and long-term benefits of this strategic decision:
Economic Growth
The significant investment in budget 2024 infrastructure is poised to have a strong multiplier effect on the Indian economy. Key sectors such as railways, highways, and ports are receiving substantial capital expenditure allocations, which are expected to:
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Improved transportation networks will enhance the efficiency of goods and services movement, reducing logistics costs and increasing overall economic productivity.
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Large-scale infrastructure projects will generate direct and indirect employment across various skill levels, contributing to job growth and economic stability.
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The government's focus on viability gap funding and supportive policies is likely to encourage private sector participation, leading to increased overall investment in the infrastructure sector.
Social Impact
The infrastructure push is not limited to urban areas but extends to rural development and social welfare, promising significant social benefits such as:
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The expansion of the PMGSY to 25,000 additional habitations will enhance rural populations' access to essential services, education, and economic opportunities.
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Transit-oriented development plans for 14 large cities aim to improve urban mobility, reduce congestion, and enhance the quality of life for city dwellers.
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Investments in railway safety measures and road safety initiatives are expected to reduce accidents and save lives.
Sustainable Development
The budget's approach to infrastructure development also incorporates elements of sustainability and long-term environmental considerations, including:
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Support for charging infrastructure will encourage the adoption of electric vehicles, contributing to reduced air pollution and lower carbon emissions.
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Focus on water treatment, sewage treatment, and solid waste management projects in 100 cities will improve urban sanitation and environmental health.
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Railway electrification projects will reduce dependence on fossil fuels and increase energy efficiency in the transportation sector.
Conclusion
The Union Budget 2024-2025 sets a robust foundation for India's infrastructure development, with significant allocations for road construction, railways, and urban development. This comprehensive approach to budget 2024 construction and infrastructure investment is poised to drive economic growth, enhance connectivity, and improve the quality of life across the nation.
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Frequently Asked Questions (FAQs)
What are the specific objectives of the 2024 budget for road construction?
The 2024 budget aims to significantly expand and improve India's road network, with a focus on both national highways and rural connectivity. The primary objectives include constructing 13,800 km of highways in 2024-25 and launching Phase IV of the Pradhan Mantri Gram Sadak Yojana (PMGSY) to provide all-weather connectivity to 25,000 rural habitations.
What role do public-private partnerships play in the 2024 budget's infrastructure plans?
Public-private partnerships (PPPs) are crucial to the 2024 budget's infrastructure plans. The government promotes private sector investment through viability gap funding and supportive policies.
What are the long-term benefits of the 2024 budget's infrastructure allocations?
The long-term benefits of the 2024 budget's infrastructure allocations include enhanced economic growth projections through improved connectivity, reduced transportation costs, and increased productivity across various sectors.
Which national highway projects are included in the 2024 budget?
The 2024 budget includes several specific national highway projects in Bihar, such as the Patna-Purnea expressway, the Buxar-Bhagalpur highway, the Bodhgaya-Rajgir-Vaishali-Darbhanga route, and an additional two-lane bridge over the river Ganga in Buxar.
