On July 23, 2024, Finance Minister Nirmala Sitharaman announced an allocation of Rs 11.11 lakh crore for capital expenditure for the fiscal year 2024-25 during the Union Budget presentation in the Lok Sabha. This allocation, representing 3.4% of GDP, was initially introduced in the interim budget and remains unchanged. The finance minister emphasized the government's commitment to providing robust fiscal support for infrastructure over the next five years, highlighting the strong multiplier effect these investments have had on the economy.
Infrastructure Investment by State Governments
In her speech, the finance minister encouraged state governments to provide similar support for infrastructure, tailored to their development priorities. To assist with this, the government has allocated Rs 1.5 lakh crore for long-term interest-free loans to states for this fiscal year.
Badal Yagnik, CEO of Colliers India, praised the budget, noting, "The Union Budget 2024-25 clearly outlines nine priority areas, including employment and upskilling, inclusive growth, manufacturing augmentation, urban development, infrastructure growth, innovation, and new reforms. This foundation is set for future budgets and envisions India’s growth trajectory over the next five years. The capital outlay of over Rs 11 lakh crore for infrastructure, at 3.4% of GDP, will promote equitable real estate growth in Tier I and II cities."
Dr. Niranjan Hiranandani, chairman of Hiranandani and NAREDCO, added, "With sustained infrastructure impetus reflected in the Rs 11.11 lakh crore Capex allocation, we anticipate a significant boost in affordable rental housing for industrial laborers."
Private Investment in Infrastructure
The government aims to boost private sector investment in infrastructure through viability gap funding and enabling policies and regulations. A market-based financing framework will be devised to support this initiative.
Pradhan Mantri Gram Sadak Yojana (PMGSY)
Phase IV of the PMGSY will be launched to provide all-weather connectivity to 25,000 rural habitations newly eligible due to population growth. This flagship program focuses on developing rural roads across India. Ravi Shankar Singh, managing director of residential services at Colliers India, stated, "Further boost to the Pradhan Mantri Aawas Yojna would help in reducing housing shortages and generating employment."
Transit-Oriented Development
The government will develop Transit-Oriented Development (TOD) plans for 14 large cities with populations over 30 lakh, complete with an implementation and financing strategy. TOD integrates land use and transport infrastructure to foster sustainable urban growth.
Investments to Boost Religious Tourism
The government announced comprehensive development plans for the Vishnupad Temple Corridor and Mahabodhi Temple Corridor in Bihar, modeled after the Kashi Vishwanath Temple Corridor. The goal is to transform these spiritually significant sites into world-class pilgrim and tourist destinations. Additional initiatives include developing Rajgir and Nalanda as prominent religious and tourist centers, along with supporting tourism in Odisha.
Connectivity and Industrial Corridors
Sitharaman highlighted plans to improve road connectivity in eastern India through the Purvodaya scheme, which aims for the comprehensive development of Bihar, Jharkhand, West Bengal, Odisha, and Andhra Pradesh. Key projects include the Patna-Purnea Expressway, Buxar-Bhagalpur Expressway, and a two-lane bridge over the Ganga in Buxar, Bihar, at a total cost of Rs 26,000 crore.
Development of Industrial Cities
The government will sanction 12 industrial parks under the National Industrial Corridor Development Programme. These "plug and play" parks will be developed near 100 cities, in partnership with states and the private sector, to enhance industrial infrastructure.
Avneesh Sood, director of Eros Group, remarked, "Establishing industrial parks with a Plug & Play model near 100 cities and emphasizing rental housing for industrial workers will enhance infrastructure and provide affordable housing options. These initiatives will invigorate the construction sector and generate millions of jobs."
Shishir Baijal, chairman and managing director of Knight Frank India, welcomed the announcements, stating, "The Union Budget for FY 2024-25 strengthens the government’s commitment to long-term social and infrastructure development. The Rs 11.1 lakh crore outlay for capital expenditure will support the development of railways, roads, and overall logistics infrastructure. The 12 industrial park projects have the potential to grow economic hubs and boost real estate development."
Aquire Acres.com News Viewpoint
The Union Budget 2024, presented by Finance Minister Nirmala Sitharaman, underscores the government’s continued focus on infrastructure development, pivotal for economic growth. Initiatives like Transit-Oriented Development (TOD) plans for 14 large cities and various road connectivity projects in the eastern states are expected to generate greater demand for employment and housing, significantly boosting real estate development in these regions.
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