Acknowledging the strong multiplier effect of building and improving infrastructure on economy, the Union Minister for Finance & Corporate Affairs, Smt Nirmala Sitharaman while presenting the Budget 2024-25 in Parliament today announced the provisioning of ₹ 11,11,111 crore for capital expenditure. It will be 3.4 per cent of country’s GDP. The Finance Minister said that the Government will endeavour to maintain strong fiscal support for infrastructure over the next 5 years.

To encourage the states to provide support of similar scale for infrastructure, the Finance Minister Smt Nirmala Sitharaman announced a provision of ₹ 1.5 lakh crore for long-term interest free loans this year. This will support the states in their resource allocation for infrastructure.

Speaking about promotion of private investment in infrastructure, Smt. Sitharaman said that investment in infrastructure by private sector will be promoted through viability gap funding and enabling policies and regulations. A market-based financing framework will be brought out, she noted.

To provide all-weather connectivity to 25,000 rural habitations which have become eligible in view of their population increase, the Finance Minister proposed the launch of Phase IV of Pradhan Mantri Gram SadakYojana (PMGSY).

Smt. Sitharaman, in her Budget Speech, also focused on creation of infrastructure for irrigation and flood management. She announced the financial support and assistance for several states affected by floods and landslides.

Noting the frequent occurrences of floods in Bihar, the Finance Minister announced the financial support for projects with estimated cost of ₹ 11,500 crore such as the Kosi-Mechi intra-state link and 20 other ongoing and new schemes including barrages, river pollution abatement and irrigation projects. In addition, she said, survey and investigation of Kosi related flood mitigation and irrigation projects will be undertaken.

Smt. Sitharaman also acknowledged the regular instances of floods in Assam by the Brahmaputra River and its tributaries, originating outside India. “We will provide assistance to Assam for flood management and related projects”, she emphasised.

Further, referring to the extensive losses suffered by Himachal Pradesh and Uttarakhand due to floods, cloud bursts and massive landslides, the Finance Minister said that the government will provide assistance to the states for reconstruction and rehabilitation. Considering the havoc wreaked by flash floods and landslides in Sikkim, she announced assistance to the state of Sikkim also.

Infrastructure capital allocation and interest free state loans to boost projects, plus rural connectivity and flood management support. A major increase in capital spending prioritises infrastructure, including provision of long term interest free loans to states to support state infrastructure investment, measures to promote private investment through viability gap funding and a market based financing framework, launch of a new phase of the rural roads programme for additional habitations, and targeted irrigation, flood mitigation and disaster reconstruction assistance for affected states.