What does the 2024 interim budget hold for the infrastructure sector?

The Indian infrastructure sector is about to get a major boost! With the interim budget for FY 2024 just around the corner (February 1st, to be precise), all eyes are on Finance Minister Nirmala Sitharaman to release her plan for propelling India’s economic engine forward. And let me tell you, based on what we saw in FY 23, the road ahead looks paved with exciting possibilities.

FY 23: A Year of Laying the Foundation 

Last year’s budget saw a significant push towards infrastructure development, with a whopping Rs 10 lakh crore allocated for capital expenditure – a 33% increase compared to the previous year! This wasn’t just lip service; we saw concrete action with initiatives like:

100 transport infrastructure projects: Prioritising last and first-mile connectivity, these projects received a Rs 75,000 crore investment, with Rs 15,000 crore coming from private sources. Think smoother commutes and easier access for everyone!

Urban Infrastructure Development Fund (UIDF): This innovative fund, created from unutilized priority sector lending, is poised to inject Rs 10,000 crore annually into tier II and tier III cities. Get ready for upgraded infrastructure, improved quality of life, and a potential boom in housing and commercial real estate!

Focus on Tribal Development: Rs 15,000 crore over three years was allocated for safe housing and infrastructure development in tribal areas under the Schedule Tribe Mission. This commitment to inclusivity is commendable.

FY 24: Raising the Bar, Building Momentum

But Finance Minister Sitharaman isn’t one to rest on her successes. For FY 24, we can expect the bar to be raised even higher, with:

Roadways: The Ministry of Road Transport and Highways is eyeing a 25% increase in budget allocation, aiming for a whopping Rs 3.25 lakh crore. This translates to more highways, better connectivity, and a smoother ride for everyone.

Aviation: The UDAN scheme, which aims to revitalize airports and introduce new regional routes, is expected to receive a 25% boost in funding. Get ready for more affordable and accessible air travel!

Continued focus on infrastructure: The government’s commitment to infrastructure development is expected to remain strong, with potential increases in funding for railways, ports, and other key sectors.

Who Stands to Gain?

With such ambitious plans, the infrastructure sector is set to be a goldmine for companies across various segments. Some big players to watch include:

Larsen & Toubro (L&T): A major player in construction and infrastructure development, L&T is well-positioned to benefit from increased government spending.

Roadways

Dilip Buildcon: With a strong presence on roads and highways, Dilip Buildcon is a prime contender for contracts under ambitious highway development plans.

Adani Ports & SEZ: As India’s largest port operator, Adani stands to gain from increased trade activity fuelled by improved infrastructure.

IndiGo: With the UDAN scheme receiving a boost, budget airlines like IndiGo are likely to see increased demand for their services.

Beyond the Numbers: A Ripple Effect 

The impact of increased infrastructure spending won’t be limited to just a few companies. It’s a ripple effect that will touch every corner of the economy. Improved connectivity will boost trade and tourism, create jobs, and attract more foreign investment. The overall quality of life will improve, with better access to essential services and amenities.

So, as we gear up for the interim budget, let’s raise a toast to the future of Indian infrastructure. It’s a future filled with faster trains, smoother roads, and a more connected nation.

Read more: Budget 2024: Will the energy sector shine in Finance Minister Nirmala Sitharaman’s interim act?

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.