Gati Shakti at heart of Budget; focus on multi-modal transport

Kolkata: The Gati Shakti initiative features at the centre stage of Budget 2022-23, highlighting the importance of quality multi-modal transport in achieving overall cost competitiveness. With global studies pegging India's average logistics costs at around 14 per cent of GDP as against 8-9 per cent for advanced economies, this is clearly a factor which needs to be addressed for attracting quality anchor investors across sectors.

In addition to significantly increasing the outlay for multi-modal infrastructure development, the Budget has also called out technology as a key enabler not only for timely completion of projects but also streamlining logistics related regulatory processes.

The Gati Shakti Master Plan for Expressways can be expected to dovetail well with the parallel announcement of the 4 MultiModal logistics parks to be developed as PPPs in FY23. Indeed, the budget seems to have taken a stronger focus on outcomes in terms of actual national productivity improvement by tying it directly to strategic infrastructure initiatives. The announcement of the Unified Logistics Interface Platform (ULIP) can be expected to complement parallel initiatives in the government's Gati Shakti plans.

Road construction momentum expected to be carried forward into FY23 given the announcement of an expansion target of 25,000 kilometre of National Highways for FY23 Rs 20,000 crore of additional finance to be raised will enable this accelerated implementation.

Infrastructure financing has also been mainstreamed in the current budget, with particular focus on environment and sustainability, as evident from the announcement around green bonds, focus of NIIF and NSIC Fund of funds on the renewables sector etc. For the rural economy and social sector in particular, the Budget also refers to blended finance as an option. This would again be linked to the Social Stock Exchange – an initiative which had been announced earlier by the government. It remains to be seen how some of these measures are implemented.

Then the allocation of Rs 48,000 crore under the PMAY scheme indicates that the government is focused on the need for housing for all. The budget seeks to develop on the social infrastructure build-out stance it has taken in earlier budgets, as evidenced by the stated coverage of 5.5 crore of water connections under the Har Ghar, Nal Se Jal scheme over the past two years and aims to build additional homes for rural and urban beneficiaries.

"The highlight for the real estate industry has been the additional infusions of 48,000 crore capital as also the 50,000 crore for the ECLGS scheme and its extension. We welcome the positive mindset of the Centre to work with the States in order to bring down the time taken for construction related clearances and hope that concrete steps are taken in this regard at the earliest. We would have liked to see the CLSS scheme extension and expansion and are hopeful that the central government will still consider it before the expiry of the current scheme," said Arya Sumant, MD, Eden Realty.

Abhishek Bhardwaj, Chief Marketing Officer, Shristi Infrastructure, also subscribed to the similar view. "The current budget has a strong focus on affordable housing. The allotment of Rs 48,000 crore for the Affordable Housing Scheme (PMAY), identification of 80 lakh households for the affordable housing scheme in 2022-23, the identification of 60,000 houses as beneficiaries for PM Awas Yojana in rural and urban areas etc shows the strong inclination of the government towards inclusive growth. We also welcome the positive mindset of the government for creating a scope for modern building by-laws as well as increased emphasis on urban planning," said Bharadwaj.

"As expected, the Budget is infrastructure heavy, with long-term focus on rebuilding the country and rebuilding the economy. The trend is the same as last year's budget with an intense focus on increased capital expenditure. An Overall 35 per cent increase in capital expenditure is the biggest indicator of the Government's priorities. Sectors involved in public capital expenditure are rejoicing in comparison to other sectors, which have precious little to celebrate. Tourism sector's Parvatmala, special zones for electronic vehicles, and acceptance of blockchain technology are all minor positive developments. But overall, ECLGS is the only notable positive announcement in the entire budget," said Rishi Jain, Managing Director, Jain Group.