By Neetu Vinayek
Budget 2024 expectations for infrastructure: As India moves forward as an economic hub, due to the significant allocation of Rs 11.11 lakh crore (representing 3.4% of GDP) in the interim budget for 2024, the infrastructure sector is the cornerstone of India’s growth narrative, it is expected to continue to receive considerable attention .
While much attention has previously focused on highways, a holistic approach to the infrastructure sector will not only facilitate efficient connectivity but also play an important role in creating jobs and improving living standards. A strong infrastructural framework can also reduce the overall cost of logistics transport, which is one of the key objectives of the National Logistics Policy, 2022. With the shipping sector being a key emitter, green shipping initiatives are gaining momentum as India seeks to align with global standards and contribute to the fight against climate change. climate change.
The Government of India has launched it National Maritime Development Program, which includes provisions for environmentally friendly shipbuilding and recycling. As clean fuel ships require higher capex, the upcoming Budget should consider incentivizing ship buyers to invest in green ships, which will facilitate the maritime industry towards more environmentally friendly operations.
Also Check | Budget 2024 Live Update: Will FM Nirmala Sitharaman give income tax relief, change the new tax regime?
In addition, the Maritime Amrit Kaal The vision underscores the government’s commitment to establish green hydrogen hub facilities in all Indian ports. By extending the sunset clause for sustainable fuel production and hydrogen fuel cell manufacturing, India may be able to attract investment in green shipping technologies and move towards its ambitious net-zero emissions target. These policy measures will not only promote innovation in the maritime sector, but also contribute to the global movement towards a sustainable and resilient shipping industry.
Inland Cruise Shipping: Growth Opportunities and Policy Impetus
The growing land cruise sector also provides opportunities for growth due to the need to develop ports to accommodate large cruise ships and build terminals with modern infrastructure to enhance the passenger experience. While the Cruise Policy of 2008 aims to make India an attractive cruise tourism destination, significant funds are required to develop infrastructural facilities at various ports in the country. Furthermore, allowing companies to operate ‘domestic cruises’ from GIFT Cities and extending the 10-year tax holiday benefits may encourage cruise companies to register their units with the International Financial Services Center (IFSC). This strategic move will stimulate the domestic cruise industry, leading to increased tourism revenue and broader economic benefits.
At National Rail Plan as a step to build an advanced railway system and increase the share of freight traffic to 45% by 2030. In the interim Budget 2024, the Minister of Finance announced the implementation of an economic corridor program aimed at developing multi-modal. connectivity, improving logistics efficiency and accelerating GDP growth. The upcoming budget will build on this momentum, with industry experts expecting weighty tax cuts related to research & development activities. The tax cuts, if announced, will be in line with India’s Railway Innovation Policy and will likely stimulate investment in critical areas such as safety equipment, rail infrastructure upgrades, and integration of advanced technology.
Also Read | Union Budget 2024: What Modi government can do to promote sustainable & affordable living through green housing
Another major segment of infrastructure development in India is aviation, which is currently undergoing significant changes, as shown by the order of more than 1,100 aircraft by Indian carriers in a period of 15 months, all of which will be delivered within the next five years. This surge in acquisitions reflects the industry’s rapid progress. To support and expand this growth, the government needs to strengthen the necessary ecosystem and infrastructure. A key component to support this expansion is the development of comprehensive Maintenance, Repair, and Overhaul (MRO) facilities in the country. Enhanced MRO capabilities will ensure minimal aircraft downtime, thereby maximizing operational efficiency. Considering these developments, the government should consider introducing fiscal incentives to encourage the establishment of state-of-the-art MRO services that can accommodate India’s large aircraft fleet.
While the upcoming Budget is an opportunity for the government to reaffirm its commitment to infrastructure development, anticipation about the APBD can be felt among various stakeholders, who are interested in the continuation and expansion of supporting measures. In addition to incentive-based programs like the PLI scheme and reduced corporate tax rates, the Budget strategy should continue to focus on financial and regulatory incentives including substantial investment in infrastructure.
With continued investment in infrastructure, policy reforms, digitization, skills development, and green logistics, governments and businesses can improve the sector’s resilience and competitiveness. Above is a list of expectations which if accepted will have the potential to give further impetus to the infrastructure sector. The right mix of financial allocations and policy reforms can help unlock the potential of the sector and steer the country towards the vision of Viksit Bharat.
(The author is Partner (Infrastructure), EY India. Jasdeep Sahni, Director, EY India also contributed to the article. Private view)
Budget 2024 expectations for infrastructure: As India moves forward as an economic hub, due to the significant allocation of Rs 11.11 lakh crore (representing 3.4% of GDP) in the interim budget for 2024, the infrastructure sector is the cornerstone of India’s growth narrative, it is expected to continue to receive considerable attention .
While much attention has previously focused on highways, a holistic approach to the infrastructure sector will not only facilitate efficient connectivity but also play an important role in creating jobs and improving living standards. A strong infrastructural framework can also reduce the overall cost of logistics transport, which is one of the key objectives of the National Logistics Policy, 2022. With the shipping sector being a key emitter, green shipping initiatives are gaining momentum as India seeks to align with global standards and contribute to the fight against climate change. climate change.
The Government of India has launched it National Maritime Development Program, which includes provisions for environmentally friendly shipbuilding and recycling. As clean fuel ships require higher capex, the upcoming Budget should consider incentivizing ship buyers to invest in green ships, which will facilitate the maritime industry towards more environmentally friendly operations.
Also Check | Budget 2024 Live Update: Will FM Nirmala Sitharaman give income tax relief, change the new tax regime?
In addition, the Maritime Amrit Kaal The vision underscores the government’s commitment to establish green hydrogen hub facilities in all Indian ports. By extending the sunset clause for sustainable fuel production and hydrogen fuel cell manufacturing, India may be able to attract investment in green shipping technologies and move towards its ambitious net-zero emissions target. These policy measures will not only promote innovation in the maritime sector, but also contribute to the global movement towards a sustainable and resilient shipping industry.
Inland Cruise Shipping: Growth Opportunities and Policy Impetus
The growing land cruise sector also provides opportunities for growth due to the need to develop ports to accommodate large cruise ships and build terminals with modern infrastructure to enhance the passenger experience. While the Cruise Policy of 2008 aims to make India an attractive cruise tourism destination, significant funds are required to develop infrastructural facilities at various ports in the country. Furthermore, allowing companies to operate ‘domestic cruises’ from GIFT Cities and extending the 10-year tax holiday benefits may encourage cruise companies to register their units with the International Financial Services Center (IFSC). This strategic move will stimulate the domestic cruise industry, leading to increased tourism revenue and broader economic benefits.
At National Rail Plan as a step to build an advanced railway system and increase the share of freight traffic to 45% by 2030. In the interim Budget 2024, the Minister of Finance announced the implementation of an economic corridor program aimed at developing multi-modal. connectivity, improving logistics efficiency and accelerating GDP growth. The upcoming budget will build on this momentum, with industry experts expecting weighty tax cuts related to research & development activities. The tax cuts, if announced, will be in line with India’s Railway Innovation Policy and will likely stimulate investment in critical areas such as safety equipment, rail infrastructure upgrades, and integration of advanced technology.
Also Read | Union Budget 2024: What Modi government can do to promote sustainable & affordable living through green housing
Another major segment of infrastructure development in India is aviation, which is currently undergoing significant changes, as shown by the order of more than 1,100 aircraft by Indian carriers in a period of 15 months, all of which will be delivered within the next five years. This surge in acquisitions reflects the industry’s rapid progress. To support and expand this growth, the government needs to strengthen the necessary ecosystem and infrastructure. A key component to support this expansion is the development of comprehensive Maintenance, Repair, and Overhaul (MRO) facilities in the country. Enhanced MRO capabilities will ensure minimal aircraft downtime, thereby maximizing operational efficiency. Considering these developments, the government should consider introducing fiscal incentives to encourage the establishment of state-of-the-art MRO services that can accommodate India’s large aircraft fleet.
While the upcoming Budget is an opportunity for the government to reaffirm its commitment to infrastructure development, anticipation about the APBD can be felt among various stakeholders, who are interested in the continuation and expansion of supporting measures. In addition to incentive-based programs like the PLI scheme and reduced corporate tax rates, the Budget strategy should continue to focus on financial and regulatory incentives including substantial investment in infrastructure.
With continued investment in infrastructure, policy reforms, digitization, skills development, and green logistics, governments and businesses can improve the sector’s resilience and competitiveness. Above is a list of expectations which if accepted will have the potential to give further impetus to the infrastructure sector. The right mix of financial allocations and policy reforms can help unlock the potential of the sector and steer the country towards the vision of Viksit Bharat.
(The author is Partner (Infrastructure), EY India. Jasdeep Sahni, Director, EY India also contributed to the article. Private view)
