Adequate funding for ongoing projects

Sustaining economic growth still depends on public expenditure for infrastructure projects. Concern for the infrastructure sector has been fiscal headroom available to continue financing projects under implementation. Maintaining the momentum of project execution is crucial. Any interim hiccups for the lean period (March to September, due to elections) might lead to a slowdown. Apprehensions in the run-up to February 1 justifiably related to: One: Government spending has been high, revenues are down. Meeting the fiscal deficit target of 3.3 per cent of gross domestic product (GDP) is a challenge. The Prime Minister’s Economic Advisory Council (PMEAC) and fiscal hawks have warned against deviating from the fiscal deficit target.

Two: Indications that the tilt in the interim Budget will be towards agriculture and social sectors. Three: Funding needs of ongoing projects make a huge demand on budgetary outlays. The government has increased budgetary and extra-budgetary expenditure on infrastructure from ~55,000 crore in 2014-15 to almost ~6 trillion in 2018-19.

Taking all this into account, the fear was that outlays for infrastructure might be curtailed. So, how has the interim Budget delivered? For the infrastructure sector, it has been a relief. There is a clear focus on implementation. It provides expected allocations across sectors (like the erstwhile Railway Budget) to continue with ongoing works. The message is clear in the vision part of the Budget speech. This is not the time for major policy announcements. Infra players should just get going with the budgetary support provided. This is what we wanted to hear. And, that is what we have got.