Union Budget 2024: Calls For Policy Reforms In Hydropower, Infrastructure Sectors
In anticipation of the upcoming Union Budget 2024, there is a collective expectation for the government to focus on policy reforms aimed at enhancing regulatory processes, providing financial incentives and fostering an environment conducive to private sector engagement in nation-building projects. The key sectors under scrutiny are hydropower and infrastructure, recognised as vital contributors to India's economic development and sustainability initiatives.
Over the past seven years, from 2016-17 to 2023-24, infrastructure allocation in the Union budget has experienced a quadruple increase from Rs 2.47 trillion to Rs 10 trillion, representing a proportionate rise from 1.6 per cent to 3.4 per cent of the GDP. The emphasis on infrastructure spending gained momentum post-pandemic, as private investment slowed down, prompting the government to inject significant public capital expenditure to rejuvenate India's infrastructure and, consequently, drive economic development. As the budget release approaches, there is widespread anticipation that the government will continue to acknowledge the crucial role of infrastructure in shaping India's economic trajectory. Investments in infrastructure, whether in hydropower projects or transportation networks, contribute to building a stronger, interconnected and prosperous nation.
The forthcoming 2024 Budget is poised to establish a comprehensive agenda for India's infrastructure sector, prioritising urban development, railways, roads, aviation, ports, and industrial growth. Recognising the need for a sustainable future, especially in the context of India's aim to achieve net-zero carbon emissions by 2070, the Union Budget 2024 is expected to support the renewable energy sector through Viability Gap Funding (VGF). This is indicative of a strategic focus on cleaner energy sources, including hydropower, nuclear power and expanded use of photovoltaics in construction projects.
Stakeholders are anticipating a surge in capital expenditure to address critical gaps in existing infrastructure and catalyse economic expansion. Calls for tax incentives to encourage private sector participation in infrastructure projects are prevalent, aiming to attract substantial investments and stimulate growth.
In summary, the 2024 Budget is expected to outline a transformative vision, strategically propelling India towards a sustainable, energy-efficient future.
The author is CFO & Whole-time Director, Patel Engineering
