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Budget keeps infrastructure spending on the front burner

Steady capex hikes have been announced for railways, highways, and ports, shipping and waterways. The approach is to prioritise ongoing projects.
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The ministry of ports, shipping and waterways has been allocated Rs 2,377.49 crore for 2024-25, marking an increase over last year’s budget. This allocation is set to enhance port infrastructure, boost cargo handling facilities, develop new ports to support rise in maritime trade. The investment will also support the Sagarmala project, aimed at port-led development, and initiatives to promote inland waterways.

The customs duty on components and consumables for vessel manufacturing will be removed. Duties on technical documentation and spare parts for warship construction have also been scrapped.

The budget has taken a consolidated view of the existing projects, but has restrained from announcing new initiatives. The national infrastructure development has been allocated Rs 11.11 lakh crore by the government, which is about 3.4 per cent of the GDP. This figure has been carried forward from the Interim Budget presented in February, underscoring a commitment to continuity rather than radical change.

Private investment in infrastructure will be promoted through viability gap funding and enabling policies and regulations. A funding of Rs 1.5 lakh crore has been budgeted for long-term interest-free loans which will support the states in their resource allocation. There are, however, no major new announcements or new schemes for railways, highways, and ports and shipping, indicating consolidation and completion of the existing bouquet of projects.

The ministry of railways has been allocated Rs.2.65 lakh Cr, which is unprecedented and includes Rs 13,000 crore from Internal Extra Budgetary Resources (IEBR), which will be used to develop MMLPs. Road transport and highways has been allocated Rs 2.78 lakh crore, reinforcing the government’s commitment towards building a robust road network across the country.

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