The massive outlay for capital expenditure in the union budget is the boldest and most timely step taken by the government to ensure a speedy economic recovery. It will address the issue of unemployment and loss of individual income which plagued the economy through the two pandemic-hit years. The government must ensure that the proposed projects and the on-going programmes maintain their time and cost schedules. Never before did the country experience such large investment programmes in highly job-oriented projects around a whole lot of fields. The outlay has been jacked up by 35.4 per cent from Rs. 5.54 lakh crore in this fiscal to Rs.7.50 lakh crore in 2022-23. Union Finance and Corporate Affairs Minister Nirmala Sitharaman and the entire government machinery deserve kudos for putting the efforts together to make it happen.
The new projects should go hand in hand with the old ones which are still under the process of implementation. The finance minister said the capital expenditure has been increased to over 2.2 times the expenditure of 2019-20 and it would be 2.9 percent of GDP in 2022-23. The virtuous cycle of investment requires public investment to crowd-in private investment. For the private investments to rise to their potential and to the needs of the economy, public investment must continue to take the lead and pump-prime the private investment and demand in 2022-23. The increase in public investment will necessarily push up private investments. The actual expenditure of the central government taken together with the provision made for creation of capital assets through Grants-in-Aid to States, is estimated to be Rs.10.68 lakh crore in 2022-23, which will be about 4.1 percent of GDP.
The capital expenditure involves large investments in basic infrastructure, including roads, railway network, ports, warehouses, airports, waterways, logistics parks, power transmission, etc. The National Highways Network is to be expanded by 25,000 km in 2022. Rs.20,000 care will be mobilised for the purpose. Despite the pandemic and economic slowdown, the National Highways Network achieved encouraging expansion. In fact, Union Road Transport and Highways Minister Nitin Gadkari has been leading the project from the front. India’s National Highways network is set to increase by over 25 percent in the next three years. The government aims to hit two-lakh kms of national highways by 2025. The country already has a National Highways network of more than 1.40 lakh kilometres. Contracts are to be awarded through PPP mode in 2022-23 for implementation of Multimodal Logistics Parks at four locations.
The railway network is being expanded and strengthened through a number of schemes, including ‘one station cone product’ concept to help local businesses & supply chains. About 2,000 km of railway network is proposed to be brought under ‘Kavach’ in 2022-23 using the indigenous world class technology. In the next three years, 400 new generation ‘Vande Bharat Trains’ are to be manufactured locally and 100 cargo terminals for multimodal logistics are to be developed.
The railways will develop new products and efficient logistics services for small farmers and Small and Medium Enterprises, besides taking the lead in integration of Postal and Railways networks to provide seamless solutions for movement of parcels. Innovative ways of financing and faster implementation will be encouraged for building metro systems of appropriate type at scale. Multimodal connectivity between mass urban transport and railway stations will be facilitated on priority. The finance minister said design of metro systems, including civil structures, will be re-oriented and standardised for Indian conditions and needs.
In fact, the Prime Minister’s ‘GatiShakti’ (Power of Speed) programme makes a transformative approach for economic growth and sustainable development. The approach is driven by seven engines, namely, Roads, Railways, Airports, Ports, Mass Transport, Waterways, and Logistics Infrastructure. The finance minister said all seven engines will pull forward the economy in unison. These engines are supported by the complementary roles of Energy Transmission, IT Communication, Bulk Water & Sewerage, and Social Infrastructure.
The finance minister said finally, the approach is powered by Clean Energy and Sabka Prayas – the efforts of the Central Government, the state governments, and the private sector together – leading to huge job and entrepreneurial opportunities for all, especially the youth. The projects will create an enormous number of jobs that will generate income, fresh consumption and bring a multiplier effect on economy. The government expects at least 60 lakh new jobs will be created under the productivity linked incentive scheme in 14 sectors.
The finance minister said with technical support from the Capacity Building Commission, central ministries, state governments, and their infra-agencies will have their skills upgraded. This will ramp up capacity in planning, design, financing (including innovative ways), and implementation management of the PM GatiShakti infrastructure projects. For 2022-23, an allocation of Rs.1 lakh crore is proposed to assist the states in catalysing overall investments in the economy. These fifty-year interest free loans are over and above the normal borrowings allowed to the states. (IPA)