Thrust on Infrastructure Development
The bright spot of the interim budget presented by Union Finance Minister Nirmala Sitharaman on February 1 is the thrust on all three dimensions of infrastructure development — physical, social and digital. Increased spending on infrastructure may help the nation reduce social inequalities by ensuring inclusive growth, as suggested in a study by the National Institute of Public Finance and Policy that every rupee spent on infrastructure and capital expenditure has a multiplier effect of 2.95 on the GDP. There were apprehensions before the presentation of the interim budget, that the government might curtail the expenditure on infrastructure to maintain fiscal balance, but the Union Finance Minister decided to continue spending in this sector as lowering allocation might have an adverse impact on the economy. It is now expected that India’s GDP growth will be around seven per cent in the next fiscal, keeping it in the race to becoming one of the fastest growing economies of the world.
Many see infrastructure development through construction of roads, bridges and other similar facilities. But this concept has undergone a sea change over the years as various other aspects have been included in the infrastructure sector. For instance, we have not heard much about digital infrastructure, till sometime back. Now, digital infrastructure has become a necessity, without which any economic success stories remain incomplete. Similarly, social spending is also a part of infrastructure development these days as it makes the society wealthier in various aspects. In this context, enhanced allocation in PM Awas Yojana is a welcome step, as it will provide a roof to those who are economically not solvent enough to have a house of their own.
The Union Finance Minister has struck the right chord by putting equal thrust on every aspect of infrastructure. She announced three major economic railway corridors aimed at facilitating multi-model connectivity and allocated INR 2.25 lakh crore for capital expenditure for the railways, considered to be the lifeline of the nation. When completed, all these projects will definitely become a part of India’s growth story. Now, focus should be given on timely completion of these projects.
In the wake of global threat, several initiatives starting from offshore wind energy projects to national green hydrogen missions have already been taken up to ensure sustainable development. In this context, the addition of rooftop solar scheme is a good move as turning to solar energy instead of fossil fuel it will help the country achieve its goal of becoming a ‘net zero’ nation by 2070. Similarly, the thrust to narrow the digital divide also should be welcomed as it can’t be ignored if India is to break into the elite group of top three economies of the world by 2029. The interim budget has touched upon these vital aspects of development but it will come down to implementation at the end of the day.