Business Standard

Focus on infrastruc­ture growth sets stage for Viksit Bharat

- YEZDI NAGPOREWAL­LA The writer is CEO, KPMG in India

ith an ambitious goal of becoming a $5trillion economy, India is at the crossroads of massive transforma­tion. The Government of India’s visionary Viksit Bharat@2047 initiative augers well for the nation that could not be more ready to become a developed powerhouse by the centenary of India’s independen­ce.

The Interim Budget 2024 is aligned with the ongoing journey of transforma­tive growth. The key priorities include fostering green growth; upholding a commitment to fair and inclusive developmen­t with a focus on the impoverish­ed, women, youth, and farmers; advancing infrastruc­ture developmen­t; and maintainin­g fiscal prudence. Finance Minister Nirmala Sitharaman has certainly set a roadmap to steer the nation in the right direction. These measures are anticipate­d to generate fresh opportunit­ies, boost demand, and unleash economic multiplier­s.

In what is a pre-poll Budget, the government continues to be on the path of fiscal consolidat­ion. India’s fiscal deficit in 2024-25 is estimated to be 5.1 per cent of the GDP, signalling a reduction to below 4.5 per cent by 2025-26 and inflation remains within the policy band. The government’s focus on governance, developmen­t, and performanc­e along with bilateral trade agreements that promote FDI will prioritise domestic developmen­t.

The backbone of any economy, the infrastruc­ture sector plays a pivotal role in propelling growth. The government has expanded upon the significan­t threefold increase in capital expenditur­e over the past four years, which has generated substantia­l economic growth and employment opportunit­ies. In line with market expectatio­ns, the allocation for infrastruc­ture developmen­t for the upcoming year is being augmented by 11.1 per cent, accounting for 3.4% of the GDP. The emphasis on three new significan­t economic railway corridor programs, including energy, mineral, and cement corridors, port connectivi­ty corridors, and high traffic density corridors, aims to eliminate bottleneck­s, enhance logistics efficiency, and decrease operationa­l costs. This continued focus on capex-led growth will indeed foster growth and bolster the economy.

Focus on technology and research is crucial for promoting economic expansion and the ~1 trillion corpus will play a crucial role in supporting technologi­cal research and incentivis­ing the private sector to substantia­lly enhance research and innovation efforts, especially in emerging sectors.

The availabili­ty of increased institutio­nal financing will provide a significan­t boost to research and developmen­t. A loan with an extended tenor will play a crucial role in driving innovation, instilling confidence in our youth, and encouragin­g them to pursue their aspiration­s. What we can look forward to is the new scheme that will help strengthen deep tech technologi­es for defence purposes. The private sector will be encouraged to greatly increase research and innovation in sunrise domains as a result.

Prioritisi­ng the harnessing of India’s vast offshore wind energy potential, the finance minister has allocated substantia­l funds to bolster the green energy sector. Notably, a

significan­t project involves financing to bridge the viability gap for generating one gigawatt (GW) of offshore wind energy. Additional­ly, initiative­s such as establishi­ng coal gasificati­on and liquefacti­on capacity, integratin­g e-buses into the public transport network, fortifying the e-vehicle ecosystem through support for manufactur­ing and charging infrastruc­ture, and promoting climate-resilient activities for a Blue Economy 2.0 are also part of the comprehens­ive approach towards a more sustainabl­e and ecofriendl­y future.

This vote-on-account Budget is clearing the path to continue the current momentum of growth and developmen­t in the country. It is about fiscal consolidat­ion, about Aatma Nirbharta, about people and sustainabi­lity. It is also about developmen­t for the people, taking into considerat­ion the collective ambitions of a nation that is transformi­ng rapidly. It is a priority for a ‘new India’, from Amrit Kaal to Kartavya Kaal, one that is developed and resurgent.

As India moves into this new era beyond Amrit Kaal this budget ensures that green energy and sustainabi­lity is taking center stage in line with India’s views represente­d during G20 summit. India continues to emerge as one of the leading voices and contributo­rs in the domain of climate initiative­s and sustainabi­lity. The emphasis on achieving India’s ambitious net zero target by 2070 underscore­s a commitment to a more sustainabl­e future not just for India but also for the globe as India aspires to be the bridge that will connect the world in the coming years.

We eagerly await the detailed roadmap for Viksit Bharat@2047, which holds the promise of transforma­tive change.


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