The Union Budget 2024-25 has largely signaled
continuity in direction. The infrastructure budget was
reaffirmed at Rs.11.11 trillion, which is 3.4 per cent of
GDP. Additionally, Rs.1.5 trillion has been provided for
states as resource assistance. The Pradhan Mantri
Gram Sadak Yojana Phase IV will provide connectivity
to 25,000 rural habitations. PM Awas Yojana (Urban)
has been allocated Rs.10 trillion to provide housing for
10 million families. However, provisions are being
made for 30 million houses in the urban and rural
schemes. Shedding the Smart Cities Mission, the
government has recognized the need for urban
development and has planned transit-oriented
development for 14 cities with populations above
3 million. Water supply, sewage treatment, and solid
waste management projects will be undertaken
through multilateral funding agencies for 100 large
cities by planning bankable projects. This would
require municipal corporations to structure projects that
are sustainable. Given that corporations spend most of
their budgets on salaries and given the short tenures of
the commissioners, projects remain dormant for
several years. Unless the Municipal Act is refreshed,
expectations of bankability will be a pipe dream.
The Finance Minister stated that the reduction in
stamp duty on property would be encouraged. City
administrators must focus on improving their property
tax collections and lowering stamp duty. With the
Long-Term Capital Gain rate of taxation having been
reduced to 12.5 per cent from 20 per cent, there is a
huge incentive to cash out property gains, and with a
lower stamp duty, buyers would be encouraged, which
will result in a higher volume of property transactions.
I believe this will lead to speculation in the property
market, which is undesirable. Emphasis has been laid
on the digitization of land records in urban areas with
GIS mapping. GIS mapping can also help corporations
compute the exact amount of property taxes that ought
to be received by them. The non-availability of digital
land records also leads to land acquisition delays,
affecting infrastructure development.
The Government has started focusing on the
development of access-controlled National Highways
and making them a minimum of two lanes with paved
shoulder standards. But 2024-25 will be a bumper
year for Railways. Not only has the budget allocated Rs.2.4 trillion, the highest ever amount for this sector,
but three corridors (1) High-traffic density corridors,
(2) Energy, Mineral and Cement Corridors, and
(3) Rail Sagar (port connectivity) corridors are also
planned to reduce logistics costs and carbon footprint.
The expected requirement for the installation of
renewable capacity by 2029-30 for railways is around
30 GW, so expect a huge scaling up of solar installations
too. The construction of the Eastern Freight Corridor has
been completed by February 2024 and is fully operational,
whereas the Western Freight Corridor has 85 per cent
operational status. Overall, 90 per cent of the network
is operational, and 300 trains run on the lines every
day. With Dedicated Freight Corridors nearing
completion, 12 industrial corridors are being planned.
Bihar and Andhra Pradesh have been included in the
infrastructure roll-out as the states鈥� ruling parties are
coalition partners with the NDA. Andhra Pradesh has
received a total commitment of Rs.500 billion, while
Bihar has received `260 billion worth of commitments.
Several rail, logistics, agriculture, and port projects have
been provided funds, and these two states will see an
acceleration in infrastructure development.
The employment schemes announced are not well
designed as they will lead to administrative difficulties,
and a wiser move would have been to provide tax
breaks for incentivising skilling and training for
corporates. This would automatically set the ball rolling
for their employability, as the skilled manpower
shortage is a real problem.
Overall, the budget pushes forward with continuity
and a focus on infrastructure development while
maintaining fiscal discipline. The states ought to pick up
the mantle and drive development before they run into
financial distress.
On 30th August we have the 4th Annual Construction
Technology Summit where we will discuss Geospatial,
3-D Printing, BIM, Prefab, Digital twin and various other
technologies while in the evening we will felicitate India鈥檚
Top Architects & Builders at the 19th Construction
World Architect & Builder Awards. Get set!
