Indian Budget 2023-24 series: Infrastructure
India is on the rise to become one of the largest economies in the world. You can check out our first blog on the recently announced union budget, which talks about the growth and resilience of the Indian economy here. India’s Finance minister Ms. Nirmala Sitharaman presented the union budget 2023-24 on Feb 1, 2023. Infrastructure development plays a huge role in a country’s overall growth potential, here are the key announcements for the development of the infrastructure from the budget:
- Capital expenditure on Infrastructure increased by 33% to $121 Bn
- Allocation to Ministry of Road Transport & Highways increased to $32.7 Bn
A never-before capex budget with highest ever allocation for highways and expressways would lead to increased demand for automotive industry in coming years.
With India’s massive capital expenditure of more than $121 Bn in infrastructure development, it is expected to boost the demand for automobiles, particularly in rural areas where the majority of the population resides. With the government’s focus on enhancing road and transportation networks and the allocated capital for the same increasing to $32.7 Bn, it will open up new markets for automotive companies and increase the reach of their products.
For instance, the Golden Quadrilateral project that connects the four major cities of India (Delhi, Mumbai, Chennai, and Kolkata) saw a surge in demand for commercial vehicles, leading to increased sales. India currently builds approximately 20 Kms of roads per day. Additionally, during 2000, the road infrastructure in India was approximately 380,000 Kms. The Indian GDP during that year was approximately $477 billion. Fast forward to 2021, and the road infrastructure in India has grown significantly to over 5.5 million Kms, reflecting the country’s continued investment in its transportation infrastructure. The Indian GDP in 2021 was estimated to be approximately $2.9 trillion.
These figures demonstrate the positive impact that investment in road infrastructure can have on the overall growth of an economy. As the transportation network expands, it facilitates the flow of goods and services, stimulates economic activity, and ultimately contributes to the overall growth and development of a nation.
For more such information, you can contact us/visit:
