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Budget Overview 2021- The Advent of Infrastructure

Mangesh Wadaje director and ceo highbar technocrat

Author –  Mr. Mangesh Wadaje, Director and CEO

Budget Overview 2021- The Advent of Infrastructure

 

 

Finance Minister Nirmala Sitharaman’s ambitious growth-oriented budget aims to revitalise India’s infrastructure. The move is expected to spark a multiplier effect on the economy and help the country keep up the development cycle.

 

Infrastructure was one of the major attractions in 2021, just the word alone was featured 57 times in the Finance Minister’s Speech. This year, the primary emphasis was on augmenting the infrastructure sector, which led to Rs 5.54 lakh crore’s capital expenditure in the next fiscal year. She mentioned creating institutional structures and giving big thrust to monetise assets to attain the goal of National Infrastructure Pipeline (NIP).

 

The sum of Rs. 20,000 crore has been allocated in the budget to leverage on Development Financial Institution (DFI). The budget also mentioned the launch of a “National Monetization Pipeline” of potential brownfield infrastructure assets. The aim is to monetise operating public infrastructure assets as an essential financing option for new infrastructure development. The five operational roads with an estimated enterprise value of 500 Crore are to be transferred to the NHAI infrastructure investment trust (InviT).

 

The bloom of Infrastructure technology on a global scale

 

The well-balanced budget will not just thrust the infrastructure development; it will also spur on technologies enabling fast-tracking ongoing and future planned projects. The use of enterprise technologies for planning and governance will be on the rise. The use of advanced technologies will reduce wastage, speed up production, give compliance strength, make the organisation data-driven and bring down the cost.

 

 

Increased employment opportunities

 

With the COVID-19 phase and massive exodus of construction workers, the infrastructure sector faced an enormous setback. The current budget brings immense opportunities not just to restore but also to improve the employment opportunities in the sector. Opening up of new public sector facilities etc. will create both short term and long term employment possibilities.

 

Exceeding expectations and commitments

 

Industry experts expected not more than 10 % rise in the budget outlay for infrastructure. However, the government exceeded expectations and increased the budget to a sizable 26 % for infrastructure. This displays the government’s commitment to the sector.

 

Financial Assistance –

The relief on TDS for dividend on REITs and InvITs will increase investments in instrument procurement. A development finance institution for infrastructure will improve funding. Also, the fact that the government has announced a more professional architecture to manage and execute the operations will make it more robust and thriving.

 

Also, the DFI is a critical inclusion, since the infrastructure is always in need of long term financial needs. On the other hand, the banks have severe liquidity issues that leave the developers in a wrong position, delay in completion, and even halt the project for a long time.

 

Conclusion

 

All these measures will trigger a chain reaction and will multiply sales for infrastructure. This budget will act as a catalyst for constant economic growth for the country, and hopefully, the government agrees.

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