Budget 2022-23: Enhancing Infrastructural & Digital Connectivity with Sunrise Opportunities

Sameera Saurabh

Union Budget 2022-23 has a significant focus on infrastructure creation as India aims to become a US$ 5 trillion economy by 2026-27. The infra and low-cost housing push has ensured that the Budget delivers on most expectations from the real estate sector. With Rs 1 lakh crore expenditure earmarked towards infrastructure development, real estate in the peripheral and peri-urban area is likely to get a boost coupled with an allocation of Rs 48,000 cr for affordable housing under PMAY (Pradhan Mantri Awas Yojana). The Budget targets to complete 80 lakh houses for identified eligible beneficiaries in urban and rural areas. This would make land in the periphery more accessible and open for future development. It is likely to increase housing sales in the periphery. It will also boost logistic and warehousing activities. The budget pushes for better urban planning in India's cities, focusing on urban sector policies, capacity building, planning, implementation, and governance.

The central government is also to work with the state governments to reduce the required time for all land and construction-related approvals. The government and financial sector regulators will work together to help the middle class and the economically weaker sections gain access to finance for affordable housing. Developers who are building affordable houses will benefit from the affordable housing focus in the Union Budget 2022. Moreover, the Government's focus on developing urban areas will boost employment, thereby raising demand for affordable houses in urban areas. Housing is vital for economic growth as it promotes the development of steel, cement, paint and other industries.

Data centers and energy storage system have been given the infrastructure status to ensure easy financing. Capital investment holds the key to speedy and sustained economic revival and consolidation through its multiplier effect. Capital investment also helps in creating employment opportunities, inducing enhanced demand for manufactured inputs from large industries and MSMEs, services from professionals, and help farmers through better agriinfrastructure.

Private investments require support 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 Centre's budgetary capital expenditure increased from Rs 5.5 lakh crore in FY22 to Rs 7.5 lakh crore for FY23. This is a 35.4 percent increase in infra Capex outlay over last year, taking the total sum to nearly Rs 7.5 lakh crore. A massive hike in financial assistance to states for Capex (in interest-free loans) from Rs 15,000 crore in FY22 to Rs 1 lakh crore in FY23 is announced.

Emphasizing the need for Indian "mega cities" to transform into centres of economic growth, tier-2 and tier-3 cities would also have to step up in terms of development. A highlevel committee of urban planners will make recommendations of urban policy, capacity building, planning and governance. In keeping with the emphasis on enhanced urban planning, the modernization of bylaws governing urban planning and central government support for masstransit projects across cities is expected. Five existing academic institutions, would be designated as centres of excellence in urban planning with an endowment fund of Rs 250 crore each. The government's aim to create 6 million new jobs over the next five years will also enable the growth of residential real estate across the country.

The Union Budget has prioritised multimodal connectivity between mass urban transport and rail network. The Finance Minister announced an outlay of Rs 20,000 crore for building a holistic infrastructure in India under the Gati Shakti National Master Plan. The initiative will increase public connectivity within the city and across the region. The PM Gati Shakti National Master Plan was launched to push the engine of growth in the Infrastructure space. It is a massive infrastructure development undertaking for seamless multi-modal connectivity. The National Master Plan is a digital platform that brings 16 ministries, such as Railways, Roadways etc., for seamless connectivity across India.

The PM Gati Shakti National Master Plan encompasses the seven engines of roads, railways, ports, airports, waterways, mass transport and logistic infrastructure for seamless connectivity and movement of people, goods and services. These engines are supported by Energy Transmission, IT and Communication, Bulk Water and Sewerage and Social Infrastructure. The PM Gati Shakti National Master Plan facilitates last-mile infrastructure connectivity, reducing travel time and increasing job opportunities.

The Government will expand the National Highways network by 25,000 Km in 2022-23 under the National Master Plan. It will cost the Government Rs 20,000 crore mobilised through innovative financing. The National Master Plan brings in a new Unified Logistics Interface Platform or ULIP to facilitate data exchange between operators across different transport modes. It promotes efficient movement of goods across different modes of transport, cuts logistics costs and encourages just-in-time inventory management to eliminate tedious documentation. Moreover, the plan also facilitates an open-source mobility stack for seamless travel of passengers across India.

The Railways play a crucial role in the National Master Plan. It will develop new products for small farmers and Micro, Medium and Small enterprises or MSMEs. Moreover, it brings a 2,000 km railway network under 'Kavach' to augment safety and capacity. PM Gati Shakti Master Plan for Expressways will be formulated in 2022-23 to facilitate faster movement of people and goods. The National Highways network will be expanded by 25,000 km in 2022-23. Rs 20,000 crore will be mobilized through innovative ways of financing to complement the public resources. As a part of Atmanirbhar Bharat, 2,000 km of network will be brought under Kavach, the indigenous world-class technology for safety and capacity augmentation in 2022-23. Four hundred newgeneration Vande Bharat Trains with better energy efficiency and passenger riding experience will be developed and manufactured during the next three years. One hundred PM Gati Shakti Cargo Terminals for multimodal logistics facilities will be developed during the next three years.

 Mass Urban Transport including Connectivity to Railways

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. Design of metro systems, including civil structures, will be re-oriented and standardized for Indian conditions and needs.

The National Master Plan ensures that local businesses benefit from the 'One-Station One-Product concept. Moreover, integrating the railways and postal network promotes the seamless movement of parcels in the country. Developing and manufacturing 400 new-generation Vande Bharat trains will enhance the passenger experience.

Parvatmala: National Ropeways Development Programme

As a preferred ecologically sustainable alternative to conventional roads in difficult hilly areas, National Ropeways Development Programme will be taken up on PPP mode. The aim is to improve connectivity and convenience for commuters, besides promoting tourism. This may also cover congested urban areas, where conventional mass transit system is not feasible. Contracts for 8 ropeway projects for a length of 60 km will be awarded in 2022-23.

The Union Budget has demonstrated the government's strong commitment towards systematic urban growth with a focus on clean tech, sustainable urban living and better governance. The government is expected to build the right balance between large megacities as well as tier-2 and tier-3 cities, while it focuses on creating mass transit systems and encourage EVs, which will help in reducing overall carbon footprint.

Prime Minister's Development Initiative for North East Region (PMDevINE)

A new scheme, Prime Minister's Development Initiative for North East, PMDevINE, will be implemented through the North-Eastern Council. It will fund infrastructure, in the spirit of PM Gati Shakti, and social development projects based on felt needs of the North-East. This will enable livelihood activities for youth and women, filling the gaps in various sectors.

Anytime - Anywhere Post Office Savings

In 2022, 100 per cent of 1.5 lakh post offices will come on the core banking system enabling financial inclusion and access to accounts through 11 net banking, mobile banking, ATMs, and also provide online transfer of funds between post office accounts and bank accounts. This will be helpful, especially for farmers and senior citizens in rural areas, enabling interoperability and financial inclusion.

Digital Banking

In recent years, digital banking, digital payments and fintech innovations have grown at a rapid pace in the country. Government is continuously encouraging these sectors to ensure that the benefits of digital banking reach every nook and corner of the country in a consumer-friendly manner. Taking forward this agenda, and to mark 75 years of our independence, it is proposed to set up 75 Digital Banking Units (DBUs) in 75 districts of the country by Scheduled Commercial Banks.

e-Passport

The issuance of e-Passports using embedded chip and futuristic technology will be rolled out in 2022-23 to enhance convenience for the citizens in their overseas travel.

Urban Planning Support to States

 For urban capacity building, support will be provided to the states. Modernization of building byelaws, Town Planning Schemes (TPS), and Transit Oriented Development (TOD) will be implemented. This will facilitate reforms for people to live and work closer to mass transit systems. The Central Government's financial support for mass transit projects and AMRUT scheme will be leveraged for formulation of action plans and their implementation for facilitating TOD and TPS by the states.

Land Records Management

Efficient use of land resources is a strong imperative. States will be encouraged to adopt Unique Land Parcel Identification Number to facilitate IT-based management of records. The facility for transliteration of land records across any of the Schedule VIII languages will also be rolled out. The adoption or linkage with National Generic Document Registration System (NGDRS) with the 'One-Nation OneRegistration Software' will be promoted as an option for uniform process for registration and 'anywhere registration' of deeds & documents.

AVGC Promotion Task Force

The animation, visual effects, gaming, and comic (AVGC) sector offers immense potential to employ youth. An AVGC promotion task force with all stakeholders will be set-up to recommend ways to realize this and build domestic capacity for serving our markets and the global demand.

Telecom Sector

Telecommunication in general, and 5G technology in particular, can enable growth and offer job opportunities. A scheme for design-led manufacturing will be launched to build a strong ecosystem for 5G as part of the Production Linked Incentive Scheme.

Atma Nirbharta in Defence

Our Government is committed to reducing imports and promoting AtmaNirbharta in equipment for the Armed Forces. 68 per cent of the capital procurement budget will be earmarked for domestic industry in 2022-23, up from 58 per cent in 2021-22. 88 Defence R&D will be opened up for industry, startups and academia with 25 per cent of defence R&D budget earmarked. Private industry will be encouraged to take up design and development of military platforms and equipment in collaboration with DRDO and other organizations through SPV model. An independent nodal umbrella body will be set up for meeting wide ranging testing and certification requirements

Solar Power

To facilitate domestic manufacturing for the ambitious goal of 280 GW of installed solar capacity by 2030, an additional allocation of Rs. 19,500 crore for Production Linked Incentive for manufacture of high efficiency modules, with priority to fully integrated manufacturing units from polysilicon to solar PV modules, will be made.

Circular Economy

The Circular Economy transition is expected to help in productivity enhancement as well as creating large opportunities for new businesses and jobs. The action plans for ten sectors such as electronic waste, end-of-life vehicles, used oil waste, and toxic & hazardous industrial waste are ready. The focus now will be on addressing important cross cutting issues of infrastructure, reverse logistics, technology upgradation and integration with informal sector. This will be supported by active public policies covering regulations, extended producers' responsibilities framework and innovation facilitation.

Sunrise Opportunities

Artificial Intelligence, Geospatial Systems and Drones, Semiconductor and its ecosystem, Space Economy, Genomics and Pharmaceuticals, Green Energy, and Clean Mobility Systems have immense potential to assist sustainable development at scale and modernize the country. They provide employment opportunities for youth, and make Indian industry more efficient and competitive. Supportive policies, light-touch regulations, facilitative actions to build domestic capacities, and promotion of research & development will guide the government's approach. For R&D in these sunrise opportunities, in addition to efforts of collaboration among academia, industry and public institutions, government contribution will be provided. Agriculture and farming sector are to be supported with technology usage such as kisan drones for crop assessments.

Conclusions

The infrastructure status to the data centre industry will help companies in availing easier credit and managing resources as the industry seeks to expand outside top cloud regions. The massive regulatory need for data localization has fuelled the industry's growth leading to investments from top Internet firms like Microsoft and Google along with home-grown giants like the Adani group. This may spur total investment in the Data-center industry in India to touch Rs 70,000-72,000 crore over the next five to ten years.The proportion of Capex in this budget out of total expenditure continues to show a significant increase and the introduction of schemes like PM-DevINE and Parvatmala will bring geographical equity to the expenditure. The government has chosen the path of public investment to nudge in private investment in infrastructure, particularly transportation and communications-to deliver growth. The National Highways, Railways and rural roads get the bulk of the enhanced allocations (Rs. 76,665 crores, Rs. 30,000 crores and Rs. 4,000 crores increases of 133 %, 28 % and 27% respectively). In addition, nearly Rs 1 lakh crores has been reserved for a 50 year interest free loan to be used by the states for infrastructure. The Budget builds a strong foundation for the future with a focus on infrastructure, sustainability and inclusive growth while maintaining fiscal prudence. The Budget reinforces India's commitment to addressing climate change with various initiatives around clean mobility. It is inclusive in its approach by addressing the rural sector, MSMEs and various economically vulnerable sections of society.

(The author is Director, Ministry of Housing and Urban Affairs, Government of India. She can be reached at sameera.saurabh@gmail. com)

Views expressed are personal