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COVER STORY

business, rural and tax-payer sentiment and consolidate India’s crore in FY2024 for Pradhan Mantri Awas Yojana in the budget.
growth prospects amidst a gloomy global “Improved access to housing in low to mid-income segments under
setting. With the Government’s borrowings PMAY and the continued focus on PMAY allocation is positive for
similar to the market expectations, the bond the cement sector. The infrastructure sector accounts for 20-25%
yields are likely to stabilise, which would also of the total cement demand. The increase in budgetary allocation
support the private sector capex plans,” said underscores the focus of the Government on the infrastructure
Ramnath Krishnan, MD & CEO, ICRA. sector,” the report said. Increased investments will provide
Both the railway ministry and highway opportunities for construction companies and contractors. On the
ministry have yet again topped the list of capital allocation in the other hand, reducing the surcharge rate from 37% to 25% in the
budget 2023-24. The capital allocation to the highway ministry for new tax regime is likely to give some thrust to the luxury segment
2023-24 stands at `2,58,605 crore, while the railway ministry has got housing. The Centre will work on critical connectivity infrastructure
a central capital allocation of `2,40,000 crore. Both the ministries projects worth `75,000 crore in the upcoming fiscal year, Finance
account for almost half of the total capital expenditure estimate Minister Nirmala Sitharaman announced in the Union Budget 2023-
of `10 lakh crore in the budget. 24. The minister said, “100 critical transport infrastructure projects,
“Roads and Railways will continue to get the dominant share, while for last- and first-mile connectivity for ports, coal, steel, fertiliser, and
allocation has also been increased for urban infra and water supply food grains sectors, have been identified. They will be taken up on
segments. Support to NHAI has been kept higher while continuing priority with investment of `75,000 crore, including `15,000 crore
with nil incremental borrowing in FY2024,” the report said. “Increased from private sources.”
capital outlay by the Central Government (including Railways) would
boost demand for various engineering equipment and create a THE ENHANCED RAIL CONNECTIVITY
multiplier effect, bolstering order books of companies,” it added. The capital outlay for the railways has been increased to the
According to ICRA, an increase in the capex support to `10.3 highest-ever `2.40 lakh crore in the Union Budget for 2023-24. The
lakh crore to states in the form of an interest-free loan remains Union budget is a “growth engine” for the country, said Minister
positive for state-funded infrastructure projects like roads, irrigation, of Railways, Communications, Electronics and Information
and water supply projects. “However, only 76% of the FY2023 BE Technology, Ashwini Vaishnaw. India’s national carrier also secured
(budget estimates) has been retained as per FY2023 RE (revised approval to produce 500 more Vande
estimates). Further, the inclusion of other purposes like scrapping Bharat trains in the next three years.
of old vehicles, urban local bodies reforms, etc., could dilute the Addressing the media after the recent Union
capex deployment to an extent,” it said. Budget, Ashwini Vaishnaw, Railway Minister
An increase in capex would also strengthen steel demand in the said that the railway department was
country as per the report. “The Union Budget’s strong push for focused on producing up to three Vande
infrastructure-led growth in the country, with the increased capital Bharat (VB) trains per week by the end of the
outlay for infrastructure projects and interest-free capex loans to next fiscal year. Besides ICF Chennai, the manufacturing of Vande
states, remains positive for steel demand,” it said. As per the report, Bharat trains would be undertaken at three more facilities.
an increase in capital expenditure is expected to support income He said, “We have to ramp up the supply chain and production.
for farm households and thereby support demand for rural housing, This year, we will expand production to three more facilities, Sonipat
which is a significant contributor (of around 30%) to the overall in Haryana, Rae Bareli in Uttar Pradesh and Latur in Maharashtra.
cement demand. The finance minister has allocated `79,600 Right now, we are doing one Vande Bharat train every seven days.”

14 CONSTRUCTION OPPORTUNITIES|FEBRUARY 2023