Union Budget 2023-2024: Priority 3: Infrastructure & Investment

1 Feb 2023 , 02:42 PM

Investments in Infrastructure and productive capacity have a large multiplier impact on growth and employment. The Budget takes the lead once again to ramp up the virtuous cycle of investment and job creation.   

Focus Area	Measures announced
Capital Investment As Driver Of Growth And Jobs	Capital investment outlay is being increased steeply for the third year in a row by 33% to Rs 10 lakh crore, which would be 3.3% of GDP.  Efforts continue to enhance growth potential and job creation, crowd-in private investments, and provide a cushion against global headwinds.
Effective Capital Expenditure	The ‘Effective Capital Expenditure’ of the Centre is budgeted at Rs 13.7 lakh crore, which will be 4.5% of GDP.
Support To State Governments For Capital Investment	Continuation of the 50-year interest free loan to state governments for one more year to spur investment in infrastructure and to incentivize them for complementary policy actions, with a significantly enhanced outlay of Rs 1.3 lakh crore.
Enhancing Opportunities For Private Investment In Infrastructure	The Infrastructure Finance Secretariat will assist all stakeholders for more private investment in infrastructure, including railways, roads, urban infrastructure and power, which are predominantly dependent on public resources.
Harmonized Master List Of Infrastructure	The Harmonized Master List of Infrastructure will be reviewed by an expert committee for recommending the classification and financing framework suitable for Amrit Kaal.
Railways	A capital outlay of Rs 2.40 lakh crore has been provided for the Railways. This highest ever outlay is about 9 times the outlay made in 2013-14.
Logistics	100 critical transport infrastructure projects, for last and first mile connectivity for ports, coal, steel, fertilizer, and food grains sectors have been identified. They will be taken up on priority with investment of Rs 75,000 crore, including Rs 15,000 crore from private sources.
Regional Connectivity	50 additional airports, heliports, water aerodromes and advance landing grounds will be revived for improving regional air connectivity.
Sustainable Cities of Tomorrow	States and cities will be encouraged to undertake urban planning reforms and actions to transform cities into ‘sustainable cities of tomorrow’. This means efficient use of land resources, adequate resources for urban infrastructure, transit-oriented development, enhanced availability and affordability of urban land, and opportunities for all.
Making Cities ready for Municipal Bonds	Through property tax governance reforms and ring-fencing user charges on urban infrastructure, cities will be incentivized to improve their credit worthiness for municipal bonds.
Urban Infrastructure Development Fund	An Urban Infrastructure Development Fund (UIDF) will be established through use of priority sector lending shortfall. This will be managed by the National Housing Bank, and will be used by public agencies to create urban infrastructure in Tier 2 and Tier 3 cities. States will be encouraged to leverage resources from the grants of the 15th Finance Commission, as well as existing schemes, to adopt appropriate user charges while accessing the UIDF. Government expects to make available Rs 10,000 crore per annum for this purpose.
Urban Sanitation	All cities and towns will be enabled for 100% mechanical desludging of septic tanks and sewers to transition from manhole to machine-hole mode. Enhanced focus will be provided for scientific management of dry and wet waste.