Budget 2024: Capex for infrastructure intact, ball now in states' court

The effective capital expenditure for the financial year is Rs 15 trillion, which includes close to Rs 3.9 trillion in grants to states for infrastructure creation

Deviating from her earlier infra capital expenditure (capex)-loaded Budgets, finance minister Nirmala Sitharaman kept infrastructure spending for key central ministries unchanged from provisions of the interim Budget.

In the interim Budget in February, the finance minister had announced a 16.9 per cent hike in capital expenditure to Rs 11.11 trillion. There were moderate hikes for railways and road transport and highways, and a push for housing.

Allocations for key central ministries remained unchanged from the interim Budget.

But a slew of infrastructure boost given to Bihar, Andhra Pradesh, and Odisha have ensured a continued capex push for the central government.

Passing the baton of infra development to the states, the FM said it will encourage them to provide support of a similar scale for infrastructure, subject to their development priorities.

“A provision of Rs 1.5 trillion for long-term interest-free loans has been made this year also to support the states in their resource allocation,” she said in her speech.

The effective capex for the financial year is Rs 15 trillion, which includes close to Rs 3.9 trillion of grants to states for infrastructure creation.

The Ministry of Road Transport and Highways has received the highest capital allocation of Rs 2.72 trillion, which is 3 per cent higher than the revised estimates of 2023-24.

The ministry will also look to monetise around Rs 30,000 crore worth of roads and plans to award 12,000 kilometres of national highways. 

Bihar, where the ruling party has been a key NDA ally, got a significant investment push in the Budget — with road connectivity projects, two-lane bridges over the Ganga in Buxar and a thermal power project in Pirpainti. “New airports, medical colleges and sports infrastructure in Bihar will be constructed,” Sitharaman said.

For another NDA ally in Andhra Pradesh, the FM announced financing and early completion of the crucial Polavaram irrigation project.

The government will also work on new frameworks for encouraging private investments in infrastructure.

A day earlier, the Economic Survey had pointed out that despite a government push for capex, private investment in infrastructure has not been to the extent desired.

“Investment in infrastructure by the private sector will be promoted through viability gap funding and enabling policies and regulations. A market-based financing framework will be brought out,” the finance minister said.