Here are some Industry comments on Budget 2022-23:
Rajeshwar Burla, Vice President and Group Head, Corporate Ratings, ICRA Limited
Infrastructure Sector: The gross budgetary support towards capital expenditure has been increased significantly with the infrastructure sector being the key beneficiary. The capital expenditure is budgeted to increase to Rs. 7.5 trillion in FY2023, which is 35.4% higher than Rs. 5.5 trillion in FY2022 BE, and 24.4% higher than Rs. 6.0 trillion in FY2022 RE. This apart, the special assistance as loan to states for capital expenditure has been increased to Rs. 1.0 trillion in FY2023 BE from Rs. 15,000 trillion in FY2022 RE. Significant support to states is expected to revive the capex by state governments. This along with higher capex by centre is expected to support the order inflow for contractors.
The union budget has also proposed to allow use of surety bonds from Insurance companies as a substitute for bank guarantees in government procurements. This will reduce the margin money/collateral requirement and consequently indirect costs for construction contractors. Further, provision for release of 75% of running bills mandatorily within 10 days will support cash conversion cycle of contactors. Overall, these measures are positive for construction companies.
Road Sector: FY2023 is a crucial year for two reasons: a) the importance of Government spending on infrastructure to revive the economy and b) the significant catch up required in the ongoing Bharatmala and allied programmes. Given the rising debt levels at NHAI, the GoI decided to fund the capital outlay for national highway projects largely through budgetary support in FY2023. Therefore, NHAI is unlikely to borrow incrementally in FY2023. To plug this, the budgetary allocations for the Ministry of Road Transportation and Highways has increased sharply by 73% to Rs. 1.87 trillion in BEFY2023 from Rs. 1.08 trillion in BEFY2022 and 55% higher than REFY2022 of Rs. 1.21 trillion. However, including the IEBR (market borrowings) and asset monetisation proceeds for the NHAI, the total capital outlay increased marginally by 4.8% to Rs. 2.08 trillion in BEFY2023 as against Rs. 1.98 trillion in BEFY2022 but 1.7% lower than REFY2022 of Rs. 2.11 trillion. Further, the asset monetisation target of Rs. 200 billion in FY2023 can be comfortably met given the strong appetite for road assets as witnessed during FY2022.
Airport Infrastructure sector: The government’s focus on the airport infrastructure sector continues with the budgetary allocation of Rs. 51.74 billion in FY2023, an increase of 24% YoY as compared to revised estimates (RE) FY2022. Of this Rs. 45.74 billion [against Rs. 31.82 billion for RE FY2022] is towards development of infrastructure for existing airports, construction of new airports under airports authority of India (AAI) and Rs. 6.00 billion [against Rs. 9.94 billion for RE FY2022] towards revival of 20 airports and for commencement of 90 routes under regional connectivity scheme (RCS).
Cement: The government’s continued focus on agriculture sector along with rural development is reflected in an increase in the budgetary allocation by 2% to Rs. 2.7 trillion in FY2023 BE compared to FY2022 BE. This is expected to support income for farm households and thereby support demand for rural housing, which is a significant contributor (of around 30%) to the overall cement demand. In addition, the target construction of 80 lakh houses under PMAY, both rural and urban, supported by a budgetary allocation of Rs. 480 billion along with a 35% increase in capital outlay towards infrastructure to Rs. 7.5 trillion including additional allocation of Rs. 1.0 trillion towards state government projects is expected to bolster cement demand.
Vipula Sharma, Senior Director - Ratings and Head – Infrastructure, Brickwork Ratings
Roads and Highways: The GatiShakti Master Plan for Expressways can be expected to dovetail well with the parallel announcement of the 4 MultiModal Logistics Parks to be developed as PPPs in FY23.
Indeed, the budget seems to take a stronger focus on outcomes in terms of actual national productivity improvement by tying it directly to strategic infrastructure initiatives. The announcement of the Unified Logistics Interface Platform (ULIP) can be expected to complement parallel initiatives in the government’s GatiShakti plans.
Road Construction momentum expected to be carried forward into FY23 given the announcement of an expansion target of 25,000 kilometres of National Highways for FY23.Rs. 20,000 crores of additional finance to be raised will enable this accelerated implementation.
Urban Infrastructure: The allocation of Rs.48,000 Crore under the PMAY scheme indicates that the government is focused on the need for housing for all. The budget seeks to build on the social infrastructure build-out stance it has taken in earlier budgets, as evidenced by the stated coverage of 5.5 crores of water connections under the Har Ghar, Nal Se Jal scheme over the past two years and aims to build additional homes for rural and urban beneficiaries.
Ramesh Nair, CEO, India and Managing Director, Market Development, Asia, Colliers
The Union Budget 2022-23 is forward looking and focuses on a long-term plan for the country with digitization, urban development, and sustainability at its core. For the real estate sector, the budget placed an outlay of INR48,000 crores under the Pradhan Mantri Awas Yojana, and the construction of 80 lakh homes will facilitate affordable housing. This, yet again, showcases the government’s commitment on building affordable housing stock. However, we would have liked if there was more push on the demand side, such as the extension and expansion of the credit-linked subsidy scheme.
The Budget made several announcements to spur growth of the logistics sector in the country. The government repealed about 1,490 union laws in recent years, paving the way for improving ease of doing business. The government also plans to launch ‘Ease of Doing Business 2.0.’ This should include more dynamic aspects and make India a more investment friendly destination.
The budget announced a few laudable incentives for startups. The time extension provided to claim tax benefits will provide a breather for start-ups and encourage more start-ups in India. We look forward to the announcement on the replacement of the Special Economic Zone Act with new legislation. This has the potential to make export-led parks attractive for investments. The new benefits will also trickle down to technology companies who export services and have a positive bearing on commercial office real estate.
Dimitrov Krishnan, President, ICEMA, Managing Director, Volvo CE India
The finance minister has delivered an investment-oriented budget that will drive infrastructure development with over 35% increase in capex outlay for infrastructure development covering road construction, river linking projects, last mile delivery of drinking water, investment in railways, investments in digital healthcare, affordable housing and many other initiatives. The PM Gati Shakti Master Plan for expressways, aimed at faster movement of goods and people, should spur road construction activity, especially with the announcement that the highway network will grow by 25000 kms in 2022-23, allocation of INR 1 lac crores to states for rural roads and infrastructure development. These measures should help create sustained demand for Construction Equipment industry. We look forward to speedy implementation of the announced measures, that will then regenerate strong demand for Construction Equipment which has seen a slackening pace in the current fiscal year.
Dr. Niranjan Hiranandani, National Vice Chairman -NAREDCO and MD Hiranandani Group
As budget decodes Kaam, Kisan and Kamai as the focus, the outlays have come out with a ‘budget for the economy’, with sustainability & infrastructure investment as its underlying theme. Rating it at 7/10, the Budget is clearly about complementing macro-growth with micro-all-inclusive welfare, digital economy and fintech, tech-enabled development, energy transition, bolstering investment and climate action – which augurs well for the nation.
Industry welcomes much awaited focus to resolve long standing issues of reduction in approval timelines for land & construction. Emphasis laid towards modernisation and reforms in building byelaws, TDR reforms, urban town planning schemes, transit oriented multi modal corridors and transferable development rights. Impetus to urban development policy with enhanced capacity building will lead holistic development of urban cities. With rise in population & career mobility, focus on nurturing new smart tier 2-3 cities will result in a big boost for Real Estate infrastructure with cascading impact on additional job creation. Extension of PMAY scheme till March 2023 along with an allocation of Rs 48,000 crores outlay will further enhance affordable housing benefits 80 lacs new beneficiaries under middle class and economic weaker sections in urban areas.
Single window portal for green clearances is a step to promote ease of doing business in augmenting sustainable development along with special mobility zones for electric vehicles. Granting of infrastructure status to data centres in lieu of impetus to data localization and protect data sovereignty is shot in the arm. This will enable the data centres industry to avail long & cheap credit financing in order to foster competitiveness to become a global data centre hub. Additional impetus on Gati Shakti, inclusive development for last mile connectivity, public investment, capital spending and financing of investments will augment steady economic growth.
Pradeep Multani, President, PHD Chamber of Commerce and Industry
It is a pragmatic and promising budget for Aatmanirbhar Bharat. It is highly encouraging that the Union Budget seeks to lay foundation and give blueprint of economy over ‘Amrit Kal’ of next 25 years - from India at 75 to India at 100. Effective capital expenditure of the Government is estimated at Rs 10.68 lakh crores in 2022-23, about 4.1% of GDP, revised fiscal deficit estimated at 6.9% of GDP as against 6.8% in Budget Estimates and fiscal deficit for FY 2023 is estimated at 6.4%. We are hopeful that fiscal consolidation will be in line in the coming years.
Strengthening of health infra, speedy vaccination programme implementation and nationwide resilient response to current wave of COVID19 pandemic are evident to all. We appreciate that the PLI Scheme in 14 sectors has received excellent response 'Make in India' can create 6 million new jobs seek to lay foundation for the next 25 years.
It is encouraging that the Emergency Credit Line Guarantee Scheme has helped 130 lakh MSMEs mitigate the worst impact of the pandemic. In this regard, extension of the ECLG Scheme upto March 2023 along with extension of guaranteed cover by another Rs 50,000 crore, bringing the total cover under scheme to Rs 5 lakh crore now, is highly appreciable and in line with PHD Chamber suggestions.
It is highly appreciable to note that the IT, Defence and R&D will be opened up of for industry and startups and 68% of capital procurement budget in defence will be earmarked for domestic industry in 2022-23. This will provide a great boost to the industrial development in the country.
To catalyse the overall investments in the economy, allocation of Rs 1 lakh crore has been made to assist the States for FY 2022-23. These 50-year interest-free loans are over and above normal borrowings allowed to States and will be used for PM Gati Shakti-related and other productive capital investments of States.
To provide a boost to the domestic manufacturing, under the PLI Scheme, additional allocation of Rs 19,500 crore has been made for PLI for manufacturing of high-efficiency modules with priority to fully integrate manufacturing units to solar PV modules. This will facilitate domestic manufacturing for ambitious goal of 280 GW of installed solar capacity by 2030.
To facilitate faster movement of people and goods, PM Gati Shakti will encompass the 7 engines for multi-modal connectivity for the states with speedier implementation of development projects through technology through Rs 20,000 crore financed by the Government to speed up this project.
The recognition of infrastructure development by Budget is also visible through announcements such as boost for Railways under the Gati Shakti plan, development and manufacturing of 400 new-generation Vande Bharat trains in next 3 years, expansion of National Highway network by 25,000 km in 2022-23, planning of 100 cargo terminals in 3 years, among others.
It is highly encouraging that for mobilizing resources for green infrastructure, sovereign Green Bonds will be issued as a part of the government’s overall market borrowings in 2022-23. The proceeds will be deployed in public sector projects which help in reducing the carbon intensity of the economy.
The budget announcements including promotion of chemical-free natural farming, promotion of use of Kisan drones for crop assessment, digitization of land records, spraying of insect pesticides, MSP direct payment of Rs 2.37 lakh crore to wheat and paddy farmers, set up of digital university with focus on Information and Communication Technology (ICT) using hub and spoke mode, among others will go a long way to support the Indian farmers and take the growth and development of agriculture sector to greater heights.
The competition of 80 lakh houses in 2022-23 for identified beneficiaries of PM Awas Yojana and identification of 60,000 houses as beneficiaries for PM Awas Yojana in rural & urban areas will be beneficial for many people who have the dream of owning a home.
The announcement of handing out of Bharatnet project contracts for optical fibre networks under PPP model and ensuring access of digital resource to all villages as urban areas will unlock the opportunities of growth going ahead.
It is highly inspiring that a high-level panel will be set up for urban planning, wherein additional allocation of Rs 19,500 crore will be made for PLI in solar PV module manufacturing, a high-level panel will be set up for urban planning, modern building by-laws will be introduced, use of public transport in urban areas will be promoted and battery swapping policy to allow EV charging stations for automobiles will be framed.
The roll out an open platform for the National Digital Health Ecosystem, consisting of digital registries of health providers and health facilities, unique health identity and universal access to health facilities is highly encouraging.
With the aim to provide a big boost to the economy, digital rupee will be issued using blockchain and other technologies by RBI starting 2022-23. Announcement on review and setting up of committee for regulatory framework for venture capital is highly appreciable.
The acceptance of use of surety bonds as a substitute for bank guarantee in government procurements will go a long way to reduce indirect cost for suppliers and work-contractors. IRDAI has given the framework for issue of surety bonds by insurance companies.
Announcements as surcharge on transfer of long-term capital gains tax capped at 15%, custom duty exemption on steel scrap is being extended by a year to help MSMEs, custom duty imitation jewellery raised to discourage their imports, reduction in custom duty on methanol, duty concessions on parts of phone chargers, transformers, etc to enable domestic manufacturing, are highly appreciable.
Last but not the least, it may be mentioned that the PHD Chamber has been working very closely with all the stakeholders of the Indian defence industry including Ministry of Defence, Armed Forces and the Paramilitary Forces for promoting indigenization and self-reliance in defence manufacturing with special emphasis on MSMEs.
We are delighted that our sincere effort has been greatly acknowledged and amplified by Hon’ble Finance Minister in Budget 2022 through some great initiatives to increase the defence capital procurement from 58% to 68% and more provisions for the private sector in R&D, testing and certification and establishment of centres of excellence in defence.
Pradeep Aggarwal, Co-Founder & Chairman, Signature Global and Chairman - ASSOCHAM National Council on Real Estate, Housing and Urban Development
The Government has always focused on affordable housing, and in this Budget, the announcement was made regarding the allocation of Rs 48, 000 crore for PM Awas Yojana, and completing 80 lakh houses in 2022-23. It was a balanced Budget that took care of the overall economic development, including improving multi-model transportation in cities and increasing the highways by 25000 km. The improvement in transportation will generate employment in cities, leading to a growth in demand for housing. The affordable segment will also benefit from the announcement of reduction of time for land and construction related approvals in urban areas which was earlier a matter of concern for the industry. The Government has also talked about tier II and III cities and that it will work with urban planners to ensure that these cities witness economic growth and employment. The Government will also work with Financial Sector regulators to expand access of capital along with reduction in cost of intermediaries; this will help the sector have access to funds to finish projects on time. Through these steps a common man can complete his dream to have a home.
Sandeep Runwal - President, NAREDCO Maharashtra and Managing Director, Runwal Group
For the first time the Finance Minister has sought to transform the real estate sector by bringing in transparency and efficiency in the business. This will help to reduce the cost of transaction and will ultimately benefit the homebuyers.
The Government's plan to launch ‘Ease of Doing Business 2.0' is a step in the right direction and it's continuous efforts to promote the same along with digitization will help the economy and the real estate sector business going forward. Single Window clearance mechanism too will go a long way in improving ease of doing business in India. This should include more dynamic aspects and make India a more investment friendly destination.
In 2022-23, 80 lakh households will be identified for the affordable housing scheme and Rs. 48,000 crore allocated for PM Awas Yojana. This together will boost the affordable housing segment and help to achieve the Prime Minister's vision of Housing for All. Also, the 60,000 houses to be identified as beneficiaries for PMAY in rural & urban areas will ensure that more and more homebuyers get to avail this benefit. As anticipated, it's a very futuristic budget focusing on economic recovery benefitting from public investment and capital spending.
J C Sharma, Vice Chairman & Managing Director, SOBHA Ltd.
We welcome the forward-looking Union Budget 2022 outlining the vision for growth for the next 25 years. The announcements made by the Hon’ble Finance Minister today with focus on urbanization, infrastructure and sustainability reflects the government’s positive intent to put the Indian Economy on the path of growth and stability. This is commendable. We see this Budget as a continuation of past few years’ Budget which is critical for the stability of policies and sustained growth.
It is also admirable to note that this Budget reflects immense clarity of thought and purpose as it provides impetus for growth along four key areas of priority: PM GatiShakti; Inclusive development; Productivity Enhancement and Investment, Sunrise Opportunities, Energy Transition, and Climate Action; and Financing of Investments. We are certain that this approach is not only futuristic and inclusive but will help our youth, women, farmers and in bringing an overall growth of the economy which will augur well for realty sector as well.
We will be the large beneficiaries with the implementation of this Budget. When the economy grows at around 8-9% with the kind of focus this Budget has on growth, employment generation and containing fiscal deficit – these are bound to contribute to the growth of the real estate sector as well. Growth in Housing will be the natural fall out of infrastructural development in the country from its importance point of view and from long term wealth creation point of view.
The proposal to complete 80 lakh homes in 2022-23 by allocating Rs. 48,000 crore under Pradhan Mantri Awas Yojana (PMAY) is a significant step to promote affordable housing for economically weaker & middle-class people in urban areas.
The Budget proposal to form a high-level committee to refine urban development is reflective of the government’s long-term planning towards creating urban centers of excellence which can develop as thriving spaces for sustainable living and offering economic opportunities for our youth and women. Such visionary and long-term goal is indeed an example of high level of urban sector policies, capacity building, governance and planning and implementation that is in the offing. This is very laudable and will augur well for the realty sector.
Despite some of these laudable steps that have been announced in today’s Budget we must not negate the challenges that the pandemic has thrown up and still exist at large. Some of the steps like reintroduction of input tax credit in GST, deduction of interest on home loan for the first-time home buyers or at least the interest subsidy should have been increased from Rs. 2 Lakhs to Rs. 5 Lakhs, granting infrastructure status to the real estate sector, and single window clearance to fast-track approvals would have gone a long way to give the much-needed fillip to the national economy speedily.
Dr Atul Goel, MD, Goel Ganga Group & President (Elect.), NAREDCO Pune
India's Union Budget 2022-23 has brought forth a host of benefits across industries. For real estate, a reduction in corporate surcharge from 12% to 7% is good news for the developer community. The issuance of digital rupee by RBI using blockchain technology will render more transparency to real estate transactions. Affordable housing has also got a boost with Rs 48,000 crore allocated for completion of construction of 80 lakh houses under PM Awas Yojana. Rs 60,000 crore have been additionally allocated for the Har Ghar Nal program. Last but not the least, additional allocation of Rs 19,500 crore for manufacturing solar modules augurs well for real estate.
Gautam Thacker, President, NAREDCO - Progressive Neral-Karjat Unit
The union budget for 2022 looks promising and balanced. It has more or less provided each sector with some benefits which will help the businesses to overcome certain uncertainty. Announcements such as 48,000 crores for PMAY, 80 lakh homes under PMAY will help boost the affordable housing market. Besides this, the government (Central and State) has designed various schemes, such as Pradhan Mantri Awas Yojana (PMAY) with the aim to build one crore homes in urban and rural India by 2022 which will further boost the boost affordable housing and achieve the vision of Housing for all by 2022 – 2023.
The Central Government in tandem with the state governments needs to align the process in order to reduce the time period required for all land and construction-related approvals. Having said that the government's move to develop urban planning with the adoption of public transportation will help the housing sector grow. The govt initiative of subsidy on housing loans through the Credit Linked Subsidy Scheme (CLSS) is benefitting the masses opting for affordable housing.
The announcement of the extension of ECLGS to help MSMEs cope with pandemic losses is a progressive move by the government with a goal to strengthen the economy and boost employment generation.
Sachin Relekar, Senior Fund Manager, IDFC AMC
Clear focus on transportation infrastructure, multi-modal logistic parks, urban planning, as well as energy transition, and it is backed by a 35% increase in capital outlay to 7.5 L Cr from 5.5 L Cr is a key highlight of budget from the infrastructure sector point of view. It emphasized on 25000 Km of National Highways and encouraged domestic industry participation in defense industry. It reinforced continuing stance of govt of focusing on job creation through infrastructure development by focusing on public infrastructure spending.
Siddharth Maurya, Resource Specialist, Expertise Real-Estate and Fund Management
The Union Budget has once again demonstrated the government’s strong commitment towards systematic urban growth with a focus on clean tech, sustainable urban living, and better governance. GOI will build the right balance between large mega cities as well as tier- 2 & 3 cities, which is a welcome move. The development agenda will also focus on creating mass transit systems and encouraging EVs which will help in reducing overall carbon footprint and give a better living experience to our city dwellers. Meanwhile, we will also like to thank the government to start 5 new urban development institutes in India, as it can herald a new beginning in urban development.
Ramani Sastri - Chairman & MD, Sterling Developers Pvt. Ltd.
Despite the fact that the real estate industry was expecting a number of immediate demand-side pushes for the sector, some significant opportunities were missed. However, the push to infrastructure spending and sops for affordable housing have kept the sector hopeful of positive changes. While affordable housing continued to remain a priority area for the government with few additional reforms, the government could have given further boost to overall real estate which fuels the Indian economy and supports over 250-allied industries. There is a huge opportunity in real estate that would enable faster economic recovery. The real estate sector has started showing signs of recovery after the pandemic disruption. However, it requires careful support from the government in order to sustain the recently-achieved growth momentum. There are currently several grey areas when it comes to schemes, taxation, funding and others where the government should provide a helping hand going forward. It is imperative for the government to pay special attention to the real estate sector and have provisions for its well-being in the near future.
Virendra D. Mhaiskar, Chairman & Managing Director, IRB Infrastructure Developers Ltd.
One of the strongest parts of this Budget is Government’s renewed commitment with its continued investment in strengthening the country’s infrastructure. The proposal to fund infrastructure through PM Gati Shakti, Public Private Partnerships, etc. will mark the escalation of economic prosperity. Overall, the budget seems to have given a booster dose to facilitate faster economic growth of the Nation; roads is definitely one of the prominent sectors to get deserved focus through adequate funding.
Vimal Kejriwal, MD & CEO, KEC International Ltd.
I welcome the forward-looking, capex-led Budget 2022, with a sharp 35% increase in outlay. A strong focus on improving the safety of Indian Railways, faster implementation of metro rail systems, infrastructure status for data centres, along with emphasis on PM GatiShakti with significant allocation towards Jal Jeevan Mission, Affordable Housing, BharatNet and building 100 Cargo Terminals for multimodal logistics facilities augur well for KEC International Ltd. and our well-diversified businesses.
Further, initiatives such as the use of Surety Bonds as a substitute for bank guarantee, a cap on Surcharge of AOPs/ consortiums at 15% as against 37% earlier and an end-to-end online e-Bill System to enhance transparency are steps in the right direction for EPC contractors such as KEC.
Kshitish Nadgauda, Senior Vice President & Managing Director (Asia), Louis Berger International
The Budget has the necessary long-term vision with the horizon established as India@100 and has a clear focus on infrastructure development. With Gati Shakti, involving the seven engines from roads to mass transit, the current budget has the right emphasis on infrastructure to drive rapid and inclusive economic growth.
For the infrastructure industry, the allocations for various infrastructure sectors and projects are welcome and will pave the way for increased efficiency in logistics and supply chains and enhance the competitiveness of the Indian economy. In addition, the budget is clearly in favor of increased private investment, and PPPs. For citizens, the Budget promises safe, convenient, and cost-effective multimodal transportation not only in Tier I but also in Tier II cities and towns. The ambitious 25,000 km expansion of national highways, and announcement of intended investment in light rail and metro lite in Tier II cities and towns and as feeder networks in Tier I cities will rightly increase the share of public transport in urban areas, thereby contributing to sustainable development.
A key aspect of the Budget with its focus on investment in infrastructure, urban and housing development, and river-linking, and transportation projects is that it should drive employment and create thousands of much-needed jobs. Increased employment coupled with the greater efficiency in the movement of people and goods would likely bring down inflation. Overall, it is a positive, promising and job-driven budget that has all the elements to revive the economy and revitalise society.
Manish Bhatnagar, MD, SKF India
The heightened expectations from the Budget 2022 have met with a matching delivery. The budget is more capital incentive - focusing more on the supply side and growth-oriented, with no adverse tax rollout. We are excited to see announcements under the ‘Battery Swapping policy’, supporting the clean tech in urban mobility space. PM Gati Shakti plan of expanding national highways by 25,000 will act as a catalyst in seamless mobility, employment generation, and efficient connectivity across the nation. We welcome FM’s announcement on cutting down of import duties on metals including steel and aluminum. The move will benefit the manufacturing sector to lower input cost and unburden the businesses from hiked steel prices.
Shubham Jain, Chief Business Officer, Real Estate and Infrastructure, CredAvenue
One of the key goals outlined by the government through this budget is to rely on the virtuous cycle starting from private investment, with public capital investment acting as an enabler for private investment. This is expected to act as a force multiplier where Capex growth for the next phase would be funded by both public and private capital. Probably the most important theme of the budget has been the big public investment for modern infrastructure. The PM Gati Shakti program would largely drive this. Under this program, key segments such as Roads, Railways, Airports, Ports, Mass Transport, Waterways, and Logistics Infrastructure are expected to get focussed attention to drive forward the infrastructure agenda. With the Government planning to use innovative financing models to fund these projects, we expect an adequate supply of required long-term capital into the infrastructure story.
Jayakumar Krishnaswamy, Managing Director, Nuvoco Vistas Corp. Ltd.
The Union Budget 2022-23 presented by the Hon. Finance Minister, Smt. Nirmala Sitaraman provides a much-needed boost in the infrastructure segment. The slew of measures announced will provide the necessary thrust for an infrastructure-led economic revival. Announcements like - allocation of INR 20,000 crores towards Gati Shakti Yojana, public investments for modern infrastructure, plans for the construction of 25,000 km of national highways, urban development and sustainable living, increased budgetary allocations of INR 48,000 crores under the PM housing schemes, the introduction of Modern building by-laws will provide much-needed impetus for India’s building material industry.
Announcements towards the reality segment by allocation of INR 44,000 crores under PM Awas Yojna to complete 80 lakh affordable houses in 2022-23 is a positive to the cement industry. Also, the proposed 35% increase in capital expenditure will definitely help to revive the economy that has been under pressure due to pandemic impact and rising inflation. Overall, the budget will pave the way for the country’s growth going forward.
Neeraj Akhoury, CEO India, Holcim and CEO & MD Ambuja Cements
The Union Budget 2022 gives a major boost to the infrastructure sector that will help the economy to recover, and grow, at pace. The PM GatiShakti framework is a visionary approach to long-term development. The cement sector will play a major role in this development journey of the country.
The Budget highlights the importance of Sustainable Development and shows India’s seriousness of its Net Zero commitment made recently during the COP26 Summit. Even at Holcim India and its two operating companies in India--Ambuja Cements and ACC, sustainability remains at the core of our business strategy.
Along with the focus on clean mobility and green energy, the proposed measures and reforms for boosting the hydro-power and solar power capabilities of India will help the nation to achieve the targets of 500-gigawatt renewable energy by 2030.
The introduction of Sovereign Green Bonds in public sector projects is the right direction in financing the decarbonizing initiatives.
Overall, Budget 2022 can be termed as a progressive policy in enabling India to transition towards a green and digital economy.
Vivek Bhatia, Managing Director and CEO, thyssenkrupp Industries India
The Union Budget for the year 2022-23 will re-energize the infrastructure sector, including multi-modal transportations through the PM Gati Shakti. With Capital Expenditure at more than 4% of GDP and a renewed push in incentivizing various sectors like agriculture, manufacturing, health, digital education, and a big move for transition to clean energy, the budget will drive industrial growth in a big way. The creation of more efficient freight corridors through an additional 25,000 km of roadways, and the launch of a Unified Logistics Interface platform will not only be a major boost for the economy but iron out the gaps in both supply and demand. The renewed thrust on Make in India is expected to generate 6 million jobs, which is important in restructuring the economy with a digital push going forward. The additional allocation to the PLI scheme will certainly bring in more investments into the economy. Concessions in import duties on raw materials, and export incentives are the right moves to make India a global manufacturing hub. It is a very forward looking and progressive budget.
Shreegopal Kabra – Managing Director & Group President, RR Global
The 2022 budget has a remarkable approach towards growth orientation. With a substantial focus on housing and infrastructure development, it provides a promising outlook that will provide a much needed boost to the economy. The provision of chemical free agriculture is good move towards health improvement and it will also help in increasing exports. The #PMGatiShakti master plan will definitely aid in reducing logistics costs in the long term. The support for urban capacity is going to improve efficiency and will also provide some relief in reducing the cost of real estate which is the need of the hour in order to afford a good living.
Avneesh Sood, Director Eros Group
We are excited that the Government has taken note of the Big private investment in infrastructure guided by Gati Shakti. The government's decision to work closely with financial institutions to expand access to capital and reduce the cost of intermediaries to promote affordable housing for the weaker sections of the society is a positive move. It is also a positive sign that the government is focusing on urban development and the decision to infuse Rs 48, 000 crore for PM Awas Yojana is an exceptional move that will boost the affordable housing segment and help to achieve the Prime Minister's vision of Housing for All. The proposal to extend 60,000 crores for providing access to tap water to 3.8 crore households and 80 lakh households for the affordable housing scheme is laudable and it shows that the government is serious about the recovery of the real estate sector which is affected heavily due to COVID-19 Pandemic.
Saransh Trehan, MD, Trehan Group
Finance Minister Nirmala Sitharaman's historic budget is an optimal blend of optimism and realism which will take the country to a higher growth trajectory. May it be agriculture, infrastructure or any other sector, the budget has laid down a clear roadmap for New India and a prosperous Bharat.
Manpreet Singh Chaddha, Chairman of Wave Group
The Union Budget for fiscal 2022-23 is certainly a growth-oriented budget. The allocation of Rs 7.5 lakh crore for capital expenditure would act a huge catalyst to achieve over 9% GDP growth. With enhanced focus on modernizing and upgrading of infrastructure, urban capacity building, in addition to making Data Centre- part of infrastructure and strengthening of public transport systems, will lead to job creation that will fuel fresh demand in the real estate sector.
Tulsi Tanti, Founder and Chairman, Suzlon Group
The Budget lays roadmap for Atmanirbhar Bharat. It is a remarkable growth oriented budget with focus on capex expenditure. The union budget 2022-23 is truly transformative one as it is firing on all cylinders within its ambit to mark yet another attempt by the government to resuscitate a pandemic-ravaged economy.
The enhanced capital outlay of Rs 35.4 per cent to Rs 7.50 Lakh crore in 2022-23 augurs well for the economy as even inflation is under check at this point.
The bold measures in the union budget encompassed almost all critical sectors of the economy, including green energy, which is expected to galvanize the recovery process which has been set into motion by this government.
It is gladdening to notice that government has maintained continuity in its policies of enhancing ease of doing business, taxation and increase private investments.
Suren Goyal, Partner, RPS Group
Finance Minister Nirmala Sitharaman deserves congratulations for pulling all the right strings in her budget. The emphasis on the infrastructure sector will boost growth in the medium to long term and will help the country in maintaining its position as the fastest growing major economy in the world. Revamping of SEZ Act will also assist in the growth of the economy
George Rajkumar, Country President, Grundfos India
Budget 2022 has laid the foundation for India@100 with the Government showing its commitment towards a sustainable and a greener future for Indians. With India expected to grow at 9.27%, the much needed impetus towards climate action has been observed in this year’s budget. The allocation of INR 60,000 crores towards the ‘Har Ghar Nal Se Jal’ initiative to connect 3.8 crore households with tap water connection is commendable and will also boost the country’s water infrastructure. While nearly half of our population is residing in urban areas, the focus on sustainable measures for megacities must also include sustainable management of water and wastewater to prevent loss of water, improve recycling and also reduce destruction from natural calamities such as floods and droughts. The roadmap of transitioning towards a circular economy across sectors is also a welcoming move and will have a direct impact on our fight against climate change. The introduction of sovereign green bonds for funding of green infrastructure and the energy audit mechanisms for large commercial buildings will be a game-changer for infrastructure projects, enabling further carbon reduction while we grow our economy by leaps and bounds.
Harresh Mehta, CMD, Rohan Lifescapes
Union Budget 2022 has further given impetus to the growth of the housing sector in India. Continued emphasis on urban planning by adopting modern laws will boost the development of the segment in the near future. Also, the government planning to launch ‘Ease of doing business 2.0’ will add different flavors with more dynamic aspects to make India a lucrative destination for investment. Overall, the budget proves to be a helping hand for more or less all the sectors keeping the current disruption in mind.
Ashish R Puravankara, Managing Director, Puravankara Limited
The Union Budget 2022 promises to be a growth-oriented and future-forward budget that would result in the overall development of the country's economy, infrastructure and logistics. The increase in capital expenditure outlay by 35.4% from Rs 5.54 lakh crore in CY to Rs 7.50 lakh crore in 2022-23 is the biggest takeaway from this Union Budget. The Government's sustainable approach to bolster its PM Gati Shakti mission will promote clean energy while creating lucrative job opportunities.
With regards to the housing sector, we are pleased that the Government has revoked custom duties levied on stainless steel and High Steel Bars. We are hopeful that these savings are passed down to the developers so that the end-users can benefit; this is yet to be determined. The announcements towards the PMAY program shows that the Government is determined to boost Affordable Housing – a growth engine for the sector. While the sector was hopeful for larger changes like GST, we are looking forward to reforms in building by-laws and urban capacity building plans, especially public transit.
Overall, the country's growth is poised at 9.2%. The measures being implemented by the Government will ensure macro-growth across most sectors, enabling the nation to improve its overall efficiency and resulting in a strong built digital economy. Furthermore, it is heartening to see a budget that was inclusive, especially towards sustainability, climate change and recognising mental health as a factor for the nation.
Vishnu Sudarsan, Partner, J. Sagar Associates (JSA)
Timely and integrated deployment of logistics and connectivity solutions is critical to improving and enhancing crucial supply chains and in the realisation of the aims of Aatmanirbhar Bharat and Make in India. Such an integrated development will also greatly aid in removing inefficiencies and redundancies, resulting in better resource utilisation and a reduction in India’s carbon footprint and integral to India’s climate action goals. This would, in turn, be an enabling factor in India’s efforts to achieve ambitious climate action goals. The railways sector, which boasts a wide-reaching network and is a lynchpin of keeping crucial supply chains operational, can play a clinching role in India’s logistics growth story and meeting the climate change and sustainability goals. The efforts of the India Railways to enhance infrastructure in response to ever-growing needs has been nothing short of spectacular, with recent initiatives such as the Vande Bharat Express underscoring India’s enviable indigenous manufacturing capabilities. However, in order to ensure a starring role for the railways in the logistics segment, it is imperative that the Railways commence involving the private sector in a meaningful and phased manner that offers a win-win to all stakeholders.
Rohan Khatau, Director, CCI Projects Pvt Ltd
The Union Budget for the fiscal year 2022 is quite robust and centered around the nation's progress, with a focus on increasing economic efficiency and infrastructure growth. PM Awas Yojana's new development will augment buying of affordable housing across India, strengthening the real estate sector. The GatiShakti master plan will lead to the transformation of key infrastructure - roads, railways, airports, ports, mass transport, waterways and logistics.
Identification of 80 lakh households for the affordable housing scheme and infrastructural boost through a focus on "digital and technology" will lead to economic and sectoral advancement and amplify the standard of life exceptionally in coming years.
Kaushal Agarwal, Chairman, The Guardians Real Estate Advisory
The budget’s resolute focus on infrastructure will certainly aid the real estate sector growth trajectory. The impetus given to road infrastructure through the new 25,000 km National Highway network will offer new momentum for the sector by opening a new market in tier-2 and tier-3 cities. The allocation of INR 48,000 crore for PMAY Urban and Rural will push the affordable housing segment.
The move to appoint a high-level panel for urban planning and designating the five existing academic institutions as the Centre for Excellence for urban planning with endowment fund of Rs 250 crore will prove pivotal for the real estate sector as both the emerging urban landscape and decaying city infrastructure need a complete overhaul. The emphasis on promoting the use of public transport in urban areas is futuristic, considering the traffic and pollution scenario in all metro cities.
Bringing 1.5 lakh post offices under the core banking system will enable financial inclusion and provide access to accounts through net banking, mobile banking, ATMs to the marginalized section. This will prove significant for farmers and senior citizens in rural areas to invest by enabling interoperability and financial inclusion. Eliminating 75,000 compliances and repealing 1,486 union laws for facilitating ease of doing business environment is a great step to promote young entrepreneurs and start-up ecosystem. In a nutshell, the budget is progressive.
However, the budget missed the opportunity to accord the long pending industry status to the Real Estate sector as a whole; currently the same has been accorded only to affordable housing. This long-pending demand would have helped developers raise funds at lower costs.
Himanshu Chhabra, Director, Skyways Group
The announcement by Hon'ble FM for connecting all the modes of operations through the Unified Logistics Interface Platform is a welcome move. It will not only be cost-effective but will increase efficiency in last-mile connectivity by planning well in advance. This will also boost confidence and credibility amongst all the stakeholders in supply chain ecosystem as it will enable real-time tracking of shipments.
Plans to set up 100 Gati Shakti Cargo Terminals for multimodal logistics facilities, 25,000 km of expansion of our National Highways, besides setting up Logistics Parks at various locations will provide an impetus for growth and will position our country to a next level logistics hub.
Prem Kishan Gupta, Chairman and Managing Director, Gateway Distriparks Ltd.
The Government plans to boost swifter movement of goods across the country and to support the same one of the main initiatives mentioned in the budget was "Gati Shakti" plan, which envisages, amongst other thing, improvising better rail connectivity. It’s encouraging for the sector to see government’s increasing focus on planning, financing through innovative ways, use of technology, and speedier implementations.
The alignment of projects in National Infrastructure Pipeline, Gati Shakti Masterplan for expressways, 100 new cargo terminals for multi-nodal logistics will boost connectivity and will be a transformative approach for economic growth and sustainable development in India. We hope that the Unified Logistics Interface Platform will assist in efficient movement of goods, reduction of logistics costs and time, and assist Just-In-Time inventory management. As India gears up and prepares for a stronger and resilient economy with considerable investments in the infrastructure and increased manufacturing, the logistics sector as a service provider will be the critical enabler.
Anshul Singhal, Managing Director, Welspun One Logistics Parks
The Union budget presented by the Honourable Finance Minister highlighted a vision of a brighter and more digitally advanced country. The focus on multimodal connectivity through the PM Gati Shakti program between mass transport and railway stations, 100 New Cargo Terminals to be developed in the next 3 Years, expansion of highways and railway development projects give us more confidence to invest in the sector and build Logistic Parks. The aim to expand the National Highways network by 15% in the next financial cycle along with targeting 25,000 km of National Highways construction is a great push for the infra sector. Gati Shakti will help lay the foundation for big private investments in infrastructure development. A completely paperless, end-to-end online e-Bill System will help enable the suppliers and contractors to submit digitally signed bills, reduce costs and track their status from anywhere. A unified logistics interface platform will enable efficient movement of goods reducing costs and time. Additionally, it will enable the government to create a blueprint for 'Amrit Kaal' for the next 25 years - from India at 75 to India at 100. Overall, from a sectorial point of view, the next cycle looks even more promising not only for the Indian infrastructure but also for sectorial investments.
Dhruvil Sanghvi, Founder & Chief Executive Officer, LogiNext
We welcome the move by the Government of India to boost logistics as a means towards ensuring economic growth. The proposal to set up a Unified Logistics Interface Platform is a welcome move. Leveraging technology to complement the development of infrastructure will help bring in better efficiency. Furthermore, with real-time tracking, and inventory management as a part of the platform, this will go a long way in bringing India at par with global supply chain networks. LogiNext has always been an advocate for digitisation of supply chains, and it is reassuring to see the Government work towards this. The decision taken to extend the tax incentives provided to startups till March 31, 2023 is a reflection of the Government’s commitment towards ease of doing business in India.
Rajesh Jaggi, Vice Chairman - Real Estate, Everstone Group
It is encouraging to see that improving India’s logistics infrastructure has been a key agenda for the ruling government. In support of the government’s vision, the Union Budget 2022-2023 has prioritised the logistics sector and extended further impetus for growth.
The Finance Minister’s focus on the Gati Shakti plan is quite constructive. The plan for expressways, construction of 100 new cargo ports for multimodal logistics parks, along with urban metro systems expansion – all of this will help spur the development of new storage and logistics facilities across the country. This will further help in lowering logistics costs. Moreover, the national highway network will be expanded by 25,000 kilometers this year, which will speed up road logistics transportation. The allocation of Rs. 20,000 crore to strengthen infrastructure projects will help to improve connectivity.
Another key point that has been discussed is the function of electric vehicles (EVs) in the logistics industry to promote sustainability. Additionally, the inclusion of technology advancements to enhance productivity will boost the performance of the logistics sector. Therefore, we feel that there is immense potential and scope to drive demand in the warehousing and logistics industry.
Rajan Aiyer, Vice President and Managing Director, Trimble, South Asia Region
This year’s budget has opened wide opportunities for the infrastructure and construction industry, with a clear focus on building a modern and world-class infrastructure for India. We welcome the significantly increased allocation to infrastructure capex compared to last year, while the measures to speed up approvals for low-cost housing projects and additional allocation to the PM Awas Yojna will together go a long way in delivering housing for all. Finally, we are glad that the government is looking to align the National Infrastructure Pipeline (NIP) with the PM GatiShakti framework, with the larger goal of economic transformation through improved pan-country logistic efficiency. Overall, the budget has underlined the government’s intent to work closely with the infrastructure and real estate industry as it seeks to build a new and modern India.
Vikas Bhasin, MD, SAYA Homes
The Union Budget 2022-23 is progressive, providing a broad-spectrum boost to the economy, particularly with its emphasis on improving the country's infrastructure. The government has increased the Capex target by 35.4 percent, from INR 5.54 lakh crore to INR 7.50 lakh crore, potentially boosting overall spending for economic growth. The budget also emphasises the importance of appropriate urban planning, while simultaneously providing some assistance to states and keeping the budgetary deficit in check. Another significant plus is that the government's goal of creating 6 million new jobs over the next five years will allow residential real estate to expand across the country. In a post-covid era, it's a good budget since it hasn't altered the tax system, leaving individual discretionary incomes unaffected and the government has continued on its stated path to job creation. However, a few pressing issues in the real estate sector remain unaddressed such as granting the sector industrial status and tax breaks on home loans to enhance buyer confidence.
Anil G Verma, Executive Director and President, Godrej & Boyce
The Budget for FY 2023 holds a lot of promise for the economy. It has a thrust for the social sector with investments in primary and vocational education, provision for drinking water to reach more households and the extension of the PM Awas Yojana to provide housing. In addition, its outlay for procurement of agricultural produce will reward the farmers for their effort and put money in their hands which will help to propel consumption demand.
The focus on the logistics sector through the PM Gati Shakti plan will give a fillip to the economy. Logistics costs in India count among the highest in the world. Creation of infrastructure is the best way to reduce the costs and introduce competitiveness in the economy to serve both the domestic market and exports. The initiative of spurring investments from the private sector by taking the lead through government investments of Rs. 7.5 lakh Cr. is laudable. The PLI scheme outlay for solar modules will support the solar power generation projects which are currently facing steep cost increases and supply constraints. Support for domestic manufacture of capital equipment by doing away with duty exemptions is also a welcome step.
Reforms in customs administration will no doubt support both the SEZs as well as other manufacturers in the domestic tariff area. Our SEZs are vulnerable to both disruptions in the global supply chain and also the emphasis on domestic sourcing that we increasingly see overseas. Permission to sell part of the capacity in DTA while maintaining a level playing field with domestic manufacturers will enhance scale and competitiveness whilst reducing reduce vulnerability. The economy is on a slow recovery path. This budget seeks to accelerate the growth through investments.
Bijay Agarwal, MD, Sattva Group
The Finance Minister’s digitally presented budget rightly represents the significant balance between growth and fiscal foresight for the Real Estate sector. The government’s move to create a high-level committee for urban planners and economists, for recommendations on urban capacity building, planning implementation, and governance, is an exceptional step to promote the growth of the sector.
We are delighted with the government’s decision to provide easy financing for data centres and energy storage systems. This step by the government will boost India’s stature as a leading data centre hub, on the global stage. This is a step in the right direction, to give further impetus to Digital India.
The allocation of 48,000 crores for PMAY, 80 lakh homes under PMAY, single-window environmental approvals, better co-ordination between the Centre and states for approval processes, and uniform registration of deeds, will provide the much-needed boost to the affordable housing segment. The announcement is in tandem with the industry’s aim to promote and boost the affordable housing segment to achieve the vision of Housing for All.
The thrust on capital expenditure which saw a hike from Rs 5.54 lakh crore in the current year, to Rs 7.50 lakh crore in 2022-23, will play a significant role in boosting the economy.
Sudarshan Lodha, CEO & Founder, Strata
Considering the importance laid on digitization of technologies and sectors, I would like to congratulate FM for promoting of use of deep tech and online interface across sectors to drive digitisation and ensure greater transparency. As real estate is the second largest contributor in employment generation and contributes over 10% of the total GDP, it is extremely encouraging to see budget laying policies for boosting infrastructure and introducing taxation benefits for real estate investments.
With real-estate encompassing for a huge chunk of LTCG, capping long term capital gains surcharges to 15 percent would encourage real estate investors to lock in their investments for a longer period, helping them maximize their gains. This will go a long way to accelerate the pandemic slowed real estate investments. Additionally introducing state partnerships in SEZ development hubs and scraping of SEZ Act would encourage businesses to stay longer driving growth and stability. Also extending tax concessions for startup community would help them revive their operations from the aftershock of pandemic.
The budget has laid out a host of measures offering huge push to the infrastructure segment which will play a catalytic role in driving consumption, urbanisation, creating employment opportunities and thereby reviving growth in the aftermath of the pandemic. All in all, it is an extremely futuristic budget with adequate focus on economic revival and growth.
Aryaman Vir, Founder & CEO, MYRE Capital
Budget 2022 is highly growth oriented that propels capital expenditure. The boost provided by the government on affordable housing will be beneficial to the continued housing demand post COVID-19 and will also encourage prospective buyers to avail more benefits and invest in real estate. With the initiation of the PM Gati Shakti, there will be a rise in infrastructure developments which will gradually lead to growth in commercial real estate sector and thus help in accelerating the economy as a whole. This will also create more employment opportunities for the youth of the country. The step taken by the government for urban development also focusing on Tier 1 and Tier 2 cities will facilitate businesses to expand across the country and rise to match the vision of a developed economy.
Rahul Kale, Founder, and CEO, Sunpower Renewables
We are encouraged with this climate-friendly budget and happy to work with the Government in achieving the goal to be net-zero by 2070. The aggressive allocation of 19,500cr for Production Linked Incentive (PLI) is a huge boost for players who are in the segment of product development for harnessing solar energy. We are glad to see the focus and support from the government for the domestic manufacturing of solar products. This can help build India as an exporting nation. This move will further enable the private sectors to come up with sustainable and innovative products that can bring the last mile connectivity and improve the efficiency in the EV ecosystem. The budget also announced that Sovereign green bonds will be issued for mobilizing resources for green infrastructure. These bonds are an important source for funding carbon-neutral projects. Availability of funds would be a key driver to help India accomplish its net-zero ambition.
Malini Saba, Founder & Chairman, Saba Group
The Union budget focuses on clean technology, sustainable urban life, better governance, and especially the government's commitment to systematic urban growth, with a strong focus on finding the right balance between metropolises and Tier 2 and Tier 3 cities.
Extending the highway network by 25,000 km as part of PM Gati Shakti's master plan will transform the infrastructure sector to enable integrated, seamless and timely delivery of projects within budget. It will also motivate private companies to participate in government projects and boost the Indian economy. Reducing corporate surcharges from 12% to 7% is a welcome move for the developer community. The introduction of digital rupees by RBI using blockchain technology will increase the transparency of real estate transactions. We welcome the government's announcement to work with the state to accelerate affordable housing, land and building permit acquisition times for the middle class and economically weaker sections in urban areas.
Manish Khandelwal, Commercial Director- India, Wavin
With the growing demand for housing and development, we are happy with the increased attention and budget allocated towards overall infrastructure of the country by the Honorable finance minister in her budget speech today. Additional public investment for modern infrastructure, be it roadways or housing development, is a big step in the right direction to creating a better and sustainable India. The increased investment also indicates that the government is actively looking for ways to improve the overall living conditions of people in the country and generate more employment opportunities in the process. Focused investment to create proper water supply channels and housing solutions will overall help in the sustainable development.
Amit Jain, Chairman and Managing Director, ARKADE Group
The budget has once again laid its focus on the real estate sector with the affordable housing space getting a further boost from the finance minister. With an outlay of Rs 48,000 crore budgeted for Pradhan Mantri Awas Yojana, target to build 80 lakh homes and single-window environmental approvals, the affordable housing segment should do well going ahead, especially when the sector was hit hard by the lockdowns triggered by the coronavirus pandemic. One was hoping that the FM would have provided some relief to the redevelopment segment, as many developers involved in redevelopment projects in several cities are struggling to keep pace with their projects, which is hit by higher taxes and some other hindrances.
Raman Bhatia, Founder & Managing Director, Servotech Power Systems Limited
The key decisions made on the renewable energy front illustrated in the Union Budget 2022 precisely addresses the most critical challenges halting India's speedy transition to a clean new era. The allocation of additional Rs 19,500 cr to the Production Linked Incentive (PLI) for the development of high-efficiency solar modules, thoughtful policies & action plans, supporting incentives for green bonds would not only accelerate our pace to achieve the 2030 target of 280 GW of installed solar capacity but would also help deliver on the 2070 net-zero emissions target commitment made by PM Narendra Modi at the COP26 summit held last year in Glasgow and play a pivotal role in tackling the global crisis of climate change.
Subhash Sethi, Chairman, SPML Infra Limited
India is at the cusp of a growth cycle and on track to become the fourth largest economy in the world with an ambition to reach $5 trillion in few years. It is also expected to be the third largest construction market by this year, 2022. The latest report said investor confidence is strong in infrastructure sector, supported by favorable long-term financing conditions, recovery stimulus packages and overseas investment in terms of FDI inflows. In FY21, infrastructure activities accounted for 13% share of the total FDI inflows of US$ 81.72 billion. India will require investments worth INR 50 trillion across infrastructure segment for sustainable development in the country.
In the Union Budget 2022-23, the government has given a massive push to the infrastructure sector under Prime Minister Gati Shakti scheme that has received its first ever outlay of INR 20,000 Crore. The scheme envisage for integrated planning and coordinated project execution with sustained monitoring of projects consisting of several ministries incorporating all government approach under one umbrella while focusing on multimodal connectivity being the key aspect of India’s economic progress.
Emphasizing the importance of investment for creating modern infrastructure, seven engines of growth has been identified - roads, railways, ports, airports, mass transport, waterways, and logistics infrastructure. The Budget aims to construct 25000 kilometres of National Highways in 2022-23, almost double of the previous year with the highest ever budget allocation of INR 1,18,101 Crores. The Additional INR 1,00,000 Crore interest free support to the states for implementation of Gati Shakti scheme and rural roads will accelerate the local economy.
Another significant announcement is the setup of 100 cargo terminals under the PM Gati Shakti. Transport and logistics infrastructure is a big constituent of the broader capital expenditure budget, estimated to be around 2.9 per cent of GDP. The announcement for manufacturing 400 new generations Vande Bharat trains by 2025 as part of the master plan will support the initiative of better energy efficiency and reducing carbon footprints while giving people a better riding experience. As part of Atmanirbhar Bharat plan, 2000 kilometers of railway network will be brought under Kavach, the indigenous world-class technology for safety and capacity augmentation in FY22.
Apart from the dedicated Bharatmala, Sagarmala, inland waterways and UDAN scheme, the Finance Minister also announced the Parvatmala; a national ropeways development programme that is being positioned as a sustainable alternative to conventional roads in difficult hilly areas. The government plans to award contracts for eight ropeway projects for a length of 60 kilometers this year. Along with logistics efficiency, huge investment in creating drinking water infrastructure, irrigation and river-interlinking, sewerage and social infrastructure with clean energy have been the highlight of the budget. There is a growing recognition about the need of proper water management with adequate infrastructure development to propel economic growth and the initiative under the Jal Jeevan Mission is a clear indication that Government of India is looking for holistic and sustainable approach.
The outlay of ₹60,000 Crore for Jal Jeevan Mission to cover 3.8 Crore more households in 2022-23 will help to expand the network of rural water connections making clean drinking water available to millions of people. At SPML Infra Limited, we are happy with the allocation as we have developed a number of projects in different states under the Jal Jeevan Mission to provide safe water to people. I am happy that the commitment of our Hon’ble Prime Minister of providing “Har Ghar Jal” is progressing well. A project completed by SPML Infra Limited under the Jal Jeevan Mission in Manipur has been inaugurated by our Hon’ble Prime Minister only the last month. The budgetary allocation for water infrastructure development is an evidence of India moving forward with a conviction to resolve water issues and to modernize water distribution system. The fund of INR 44,605 Crore allocated for the Ken-Betwa river linking project will help to provide drinking water facilities to 62 lakh people and better irrigation to 9 lakh hectares while supporting clean energy generation of 103 MW hydro power and 27 MW solar power. At SPML Infra, we know that the project will bring a big difference in people’s lives and agriculture yields as we have been part of the progress of such a large project in Gujarat called as Saurashtra-Narmada Avataran Irrigation Yojana (Sauni Yojana), which is quite successful in its target.
The allocation under Swachh Bharat Mission (Rural) of ₹9,994 Crore and ₹2,300 Crore for Urban, AMRUT Scheme with ₹7,300 Crore, National Mission for Clean Ganga for ₹600 Crore, Major & Minor Irrigation Projects of ₹4,904 Crore along with other urban infrastructure development projects will certainly be a game changer in the water sector in India. The linking of five rivers including Damanganga-Pinja, Krishna-Godavri, Krishna-Pennar, Pennar-Cauvery, Par Tapi- Narmada is going to have a long term impact on water sustainability initiatives in the proposed regions. I am happy that the budget is growth-oriented with a special focus on infrastructure development, which is a major instrument for growth. The focus on Aatmanirbhar Bharat and Infrastructure is encouraging and will be able to address the prevailing market challenges to propel the economy to surge ahead in the coming years helping us with what we need to achieve. The Capex of INR 7.5 Lac Crore once implemented will have a huge multiplier effect in creating employment and will further boost a virtuous cycle of growth.
Manoj Kumar, Director, Rodic Consultants
The Union budget 2022-23 is one of the remarkable budget which can be termed as a booster for infrastructure. It will help in India's aspiration of becoming a USD 5 trillion economy. The government’s strong approach towards accelerating infrastructure development, sustainability along with digitalisation in every sphere of business will give a strong impetus to the overall economy while empowering consumerism in India. India plans to raise spending on infrastructure in its annual budget to set the economy on a strong footing. PM Gati Shakti was sparked by the seven engines of roads, railways, airports, ports, mass transport, waterways and logistics. The National Highway network will be expanded by 25,000 km in 2022-23, and Rs 20,000 crore will be spent. The Budget set aside Rs 60,000 crore under Jal Jeevan Mission. The scheme is aimed at providing drinking water to 3.8 crore households in 2022-23. In addition, Rs 44, 605 crore has been allocated for the Ken-Betwa river linking project.