How does Union Budget affect infrastructure sector?
- 1. How does Union Budget affect infrastructure sector?
- 2. Introduction • The budget usually affects companies across sectors when certain duties and taxes are changed. However, no other sector receives so much attention as infrastructure. • A fast-growing economy needs to keep up with its infrastructure to maintain the fast growth. • Here is how budgets influence companies in the infrastructure space.
- 3. Roads & Bridges
- 4. Roads and Bridges • The government, makes an allocation to development of roads in rural India and to connect urban centers across the country. • This gives a significant push to companies that build roads, bridges or manage tolls to recover the cost of making it. • Watch out for- Money provided for developing roads in the budget.
- 5. Airports
- 6. Airports • India is a country that has about 250 commercial airports. A country smaller in size, like France, has that many. • The budget each year initiates projects that entail rebuilding existing airport facilities or develop new projects. • This usually helps companies that bid for airport projects.
- 7. Urban Infrastructure
- 8. Urban Infrastructure • While many cities are evolving in India, they constantly need to upgrade the existing infrastructure. • To enhance connectivity within the urban centers, the government provides budgetary support to metro, monorail or bus transport. This is an important number to watch out for.
- 9. Power
- 10. Power • No country can grow at a significant rate without adequate power. • The government usually makes significant allocation to the power sector to enhance the generation of power. • The budget also provides incentives to state electricity boards to cut losses. • It also provides allocation to build transmission lines through public sector companies. The rural electrification initiative, also, receives support from the budget. Power producers, power equipment makers, those generating power through solar or wind energy benefit from the budget announcements.
- 11. Railways
- 12. Railways • Railways are the lifeline of Indian goods as well as passenger movement. India has one of the largest railway networks in the world. • The Railway budget is presented separately every year, underscoring the importance of this infrastructure sector in India. • Additional allocations for extending the reach of the railways and improving services provide an opportunity to the concerned companies / entities.
- 13. Real Estate
- 14. Real Estate • This is also an important part of the budget every year. • Successive governments have been focused on providing affordable housing to the people of the country. • Relevant companies await major announcements on this front every budget.
- 15. Infrastructure Finance
- 16. Infrastructure Finance • The budget usually provides for financing the infrastructure sector through institutions. • While the center provides the initial corpus for projects outlined in the budget, it invites private companies or state governments to participate in these projects and execute them. • The first part of the budget speech usually dwells on this aspect.
- 17. Final note • In a nutshell, watch out for the important allocation of money to infrastructure in the Part A of the speech and tax incentives provided in Part B. • To learn more about the Union Budget, click here.
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