Finance Minister Nirmala Sitharaman announced on Thursday that the Indian government will be investing Rs 11.11 lakh crore ($150 billion) in infrastructure, with a focus on deep-tech and startups to boost India’s innovation-led economy. This comes as part of the last Budget before general elections in the Modi government, with a firm commitment to continue reforms and avoid populist measures.
The spending on infrastructure, including roads, ports, and airports, has been increased by 11 percent to Rs 11.10 lakh crore, aiming to sustain the current economic growth and create more job opportunities. In addition, the Union government will provide long-term loans worth Rs 1.3 lakh crore to states, specifically for infrastructure development.
The Budget also highlighted the promotion of private and public investments in post-harvest activities, such as modern storage and supply chains, as well as a focus on self-reliance in oilseeds.
Despite these investments, the government remains committed to fiscal consolidation, targeting a reduction in the fiscal deficit to 5.1 percent of GDP by 2024-25 compared to the current year’s revised estimate of 5.8 percent.
As part of supporting reforms by states and realizing the vision of ‘Viksit Bharat’ (Developed India), the Union government will provide interest-free loans of Rs 75,000 crore for 50 years.
Commenting on the budget, experts have expressed optimism about the impact of increased infrastructure spending. Amarjeet Singh, a logistics expert, said, It will have a good impact, 11 percent is a very good hike. This will further improve our logistics efficiency and connectivity and ultimately lower the logistics cost. He added that the combination of fiscal consolidation and focus on hard infrastructure, such as roads and railways, is a unique selling point of this Budget.
The government’s vision is to transform India into a developed nation by 2047. By prioritizing investments in deep-tech and startups, the government aims to enhance innovation and entrepreneurship in the country, ultimately driving economic growth.
The Budget announcements reflect a commitment to strengthening India’s innovation-led economy by providing significant investments in infrastructure and supporting deep-tech and startups. The focus on fiscal consolidation demonstrates a responsible approach to managing the deficit while creating an enabling environment for economic growth and job creation. As India moves towards becoming a developed nation, these measures are crucial in ensuring sustainable progress and fostering a culture of innovation and entrepreneurship.
