is one of the most important drivers of the Indian economy. Since it requires growth in manufacturing and industry, an increase in spending in this sector multiplies overall economic growth. The infrastructure sector is stimulating India's economic growth by encouraging the creation of related businesses such as cement, real estate and construction development projects.
This has led to increased investment in these areas - a notable example being the increase in industrial activity in Uttar Pradesh due to the construction of large highways in the state.
The infrastructure sector in India is expecting a lot from the Union Budget 2023
. The government has already made some announcements in the previous budgets to boost the infrastructure sector. However, there is still a need for more investment and reforms to ensure that the sector can reach its full potential.
The expectations of the infrastructure sector include increased public-private partnerships, tax incentives for businesses investing in infrastructure projects, and funding for research and development. Furthermore, there are also expectations of reforms in policies related to land acquisition and labour laws which will help create an enabling environment for investment in infrastructure projects.
Let us look at the top 10 realistic expectations of the infrastructure sector from the Union Budget 2023:
1) ‘Industry’ status for the real estate sector
2) Higher allocations for urban services
3) More emphasis on capacity building, project execution and project implementing agencies
4) Incentivizing of long-term debt raising through infrastructure bonds/tax-free bonds
5) Special package for promoting municipal bonds
6) Reduction in GST (28 percent) on cement to reduce construction cost
7) PPP revival by Infrastructure Finance Secretariat (IFS) to address the requirements of health and education sectors
8) Cap on prices of raw materials in infra- specifically in steel and cement
9) Special budgets for climate mitigation and adaptation efforts, to build climate-sensitive and climate-smart cities
10) Task Force to examine the concepts of carbon tax and carbon credits trading system relevant to India
“Industry status for the sector and single window clearance for projects has been a long-standing demand which we expect the Government to address. Apart from this, we are expecting a more determined infrastructure push from the Government not only in the form of more funds but with strict guidelines on actual infra deployment. This will certainly boost the real estate sector and also generate more jobs that the Government has committed to deploy,” says Navin Makhija - Managing Director, The Wadhwa Group.
A lot will depend on this year’s budget and the government is expected to invest heavily in this sector to ensure that it can keep pace with the country's development. It will result in a massive increase in the number of projects being undertaken, from building roads and bridges to constructing new airports and ports.