Budget 2022: From railway to road, government gives booster shot to infrastructure; analyst’s view

The Union Budget 2022-23 seems to be focused on high impact areas and accelerating the capital expenditure cycle, as the Capital Expenditure (Capex) target has been increased by 35 per cent to Rs 7.5 lakh crore, said the market analyst and Sandeep Upadhyay, Managing Director – Infrastructure Advisory, Centrum Capital Limited.  

He mentioned that this is a major shot in the arm for the infrastructure sector and certainly much higher than market estimates and it is pertinent to note the reference towards investments into capacity building initiatives within the infrastructure sector for much needed skill upgradation. 

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Moreover, the increase in capital expenditure certainly suggests that reorientation of focus towards much needed planning, monitoring and supervision of the massive investments being planned and not just splurging towards unleashing the capex cycle, the analyst said in his post budget comment. 

Sector wise, key beneficiaries are stakeholders in the transportation and logistics sector, where in Rs. 25,000 crore is planned to be invested in FY23 in road sector along with further strengthening the ecosystem for Expressways, Upadhyay said.  

100 new cargo terminals to be built in next 3 years and manufacturing new generation 400 Vande Bharat trains with improved energy efficiency is a major push towards catalyzing manufacturing sector through robust demand being generated from the infrastructure space, he mentioned. 

“Launch of National Bank for Infrastructure development, capitalization of NIIF and raising Green Bonds to pursue thematic investments including Energy Transition, Climate change and carbon footprint apart from funding conventional public infrastructure projects could continue to playing a critical role in meeting the ambitious targets set as per the National Monetisation Plan and National Infrastructure Plan,” the analyst said in a comment. 

IRDAI (Insurance Regulatory Development Authority of India) coming up with a new framework for Surety Bonds could be another game changer however one will have to wait to go through the fine prints and its application, he mentioned.