The budgetary allocation to key transport infrastructure ministries remained similar to the last fiscal year, with industry experts noting the absence of large capex project announcements but recognizing the evident intention to pursue innovative development models.
Presenting the budget, Finance Minister Nirmala Sitharaman reiterated the interim budget allocation of Rs 11,11,111 crore for capital expenditure, which is 3.4 percent of GDP. Notably, her 90-minute budget speech mentioned no specific projects in the railways and highways sectors except for those in Bihar.
There were speculations that the government might announce Production Linked Incentives (PLI) for manufacturing in railways, particularly regarding the high production pipeline of Vande Bharat trains.
Sandeep Upadhyay, Managing Director of Infrastructure Advisory at Centrum Capital Ltd, termed the budget as a measured approach aligned with a progressive, long-term focused agenda. “The exuberance of announcements of large capex projects was missing; however, the intentions of pursuing innovative development models were evident. One was expecting specific announcements on railways in continuation to the interim budget. However, a large capital outlay for upgrading railway infrastructure with an emphasis on improving safety, convenience, and comfort of passengers is already in place as per the interim budget announcement,” he said.
The net revenue expenditure of Indian Railways is set at Rs 2,78,500 crore in the Budget Estimate for 2024-25, compared to Rs 2,58,600 crore in the Revised Estimate for 2023-24, an increase of Rs 20 crore. A similar situation is seen with the Ministry of Road Transport and Highways (MoRTH), with a total net allocation of Rs 2,84,000 crore against Rs 2,70,434 crore in FY24.
The finance minister called for increased private investment in infrastructure development. “Investment in infrastructure by the private sector will be promoted through viability gap funding and enabling policies and regulations. A market-based financing framework will be brought out,” she said.
To promote domestic aviation, the budget proposed extending the period for the export of goods imported for repairs from six months to one year, while the time limit for re-import of goods for repairs under warranty was extended from three to five years.