Budget gives a big leg-up to infrastructure industry: Experts

MUMBAI: The infra industry has hailed the added focus the sector has received in the Budget, saying the proposals will give a big boost to this key growth driver.

The Budget has allocated Rs 3.96 trillion to infra sector to spur economic activities and create more jobs and has also accorded infrastructure status to affordable housing projects which will give lot of tax incentives to the players.

"The Budget augments the already established mode of using budgetary spend to boost infra segment. Integrated transportation focus, including railways, metros, multi-modal transport, highways, is transformational that can take growth into the next orbit," KPMG India's Manish Aggarwal said.


For the transport sector as a whole, including railways, road, shipping, the Government has made a provision of Rs 2.41 trillion in 2017-18.

"It is also noteworthy that Railways has been given due importance with a total outlay of Rs 1.31 trillion out of which Rs 55,000 crore is committed from the Budget.

"There is clear focus on rail safety with a national rail safety fund with a corpus of Rs 1 trillion for five years and passenger convenience through station redevelopment," said Deloitte Touche Tohmatsu India's Vishwas Udgirkar.

For highways, the budget allocation has been stepped up to Rs 64,000 crore from Rs 57,676 crore, he noted.

"In the aviation sector, select airports in tier-II cities have been proposed for development through PPP mode which will complement the regional connectivity plans.

"The Airports Authority of India Act will be amended to enable monetisation of land assets and unlock their value. But ports and shipping, one of the focus areas of the government, is a surprise omission in the Budget," he said.

Centrum Infra Advisory's Sandeep Upadhyay said, "Within the infra sector the focus continues to be on pushing capex in transportation sector with major impetus for the Railways. But the pace of rolling out infra projects including the need of single-window clearance and reforming PPP framework and dispute resolution with contractors are where the authorities really need to focus on."

Essar Ports' Rajiv Agarwal said measures including those in respect of public infra spending, rural spending and tax cuts will help increase consumption and help fasten growth The FM has also accorded infra status to affordable housing segment which is likely to boost the sector.

"The Budget provisions will have several spin-off benefits. Granting infra status and higher fund allocation for affordable housing (Rs 23,000 crore) is a welcome step," IMC's Deepak Premnarayen said.