Budget 2022: A big infra push
After two years of the pandemic, and in the 75th year of our independence, the Union budget for FY2022-23 is released.
The Union Budget for FY 2022-23 this year aims to improve infrastructure by focusing on four key areas:
- PM GatiShakti
- Inclusive Development
- Productivity Enhancement & Investment, Sunrise opportunities, Energy Transition, and Climate Action
- Financing of investments
The Union government has reaffirmed its commitment to utilize infrastructure as a force multiplier for sustainable economic growth in Budget 2022-23, with a budgeted infrastructure investment of over Rs 10 lakh crore and a CAPEX increase of over 35% y-o-y. One of the primary focus areas in infrastructure is using multimodal transportation infrastructure to minimize logistics costs and improve India’s overall competitiveness. Similarly, the budget has emphasized the importance of collaboration across several Ministries/Agencies to identify and complete important projects on time. The Gati Shakti initiative, which is one of the centerpieces of Budget 2022-23, would solve both issues. Gati Shakti will be built on digital technologies, including GIS.
Moreover, 1 lakh crore to assist them in boosting total economic investment. The budget places a strong emphasis on essential growth engines, with Prime Minister Gati Shakti pledging to build critical infrastructure such as roads, ports, trains, and logistics, among other things. Reforms in these areas will boost the mobility of products and services and lay the groundwork for economic growth in the coming years. KAWACH, an indigenously produced device that helps prevent rail accidents, would be used for a total of 2,000 kilometers of the rail network. Over the following three years, 400 new-generation high-speed Vande Bharat trains will be produced. The national highway network will be expanded by 25,000 kilometers in 2022-23. Housing is a critical sector, and the PM Awas Yojana has been allocated $48,000 crore by the government. A total of 60,000 dwellings in rural and urban areas would be recognized as beneficiaries under the scheme.
In sectors where state governments have control, such as urban infrastructure, irrigation, health, and education, state governments are likely to play a stronger role. The budget has boosted the spending for “State Government Support for Capital Expenditure” from Rs 15,000 crore in 2021-22 to Rs 1 lakh crore in 2022-23 to incentivize them to improve infrastructure in these areas. This money would be handed to the states in the form of a 50-year interest-free loan, on top of the concessional financing already in place for Atmanirbhar Bharat reforms, asset monetization, and other initiatives.
GST collections in January 2022 reached an all-time high of ‘1,40,986 crore,’ according to the finance minister. This is both exciting and significant since it indicates that growth is occurring across sectors. It also indicates that a growing number of organizations are becoming more compliant and have demonstrated their trust in governance.
Overall, it was a decent Budget that recognized the need to invest in India’s infrastructure to spur long-term economic growth while also allocating adequate cash for education, healthcare, and inclusive growth. It contains the correct combination of suggestions for the economy in the post-COVID era.
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