The central government boosted infrastructure development in the union budget 2023-24 by allocating ₹ 10 lakh crore as capital expenditure for the fiscal year 2023-24. This is much more than the ₹7.5 lakh crore authorised in fiscal 2022-23, of which around 60 percent has been spent as of the conclusion of the fiscal year.

The government’s emphasis on increasing infrastructure investment, along with a healthy pipeline of building projects, is projected to underpin the expansion of the Indian construction sector in the future. According to the Ministry of Statistics and Program Implementation’s Infrastructure and Project Monitoring Division (IPMD), as of January 1st, 2023, there were 1,438 projects in the pipeline with an estimated cost of ₹20.4 trillion ($253.9 billion). In terms of the initial cost of the project, the road transportation and highway sector accounts for the most significant percentage of the project pipeline (18.7 percent), followed by the petroleum (18.7 percent), railway (18.3 percent), and urban development (13.9 percent) sectors. Despite a robust project pipeline, obstacles such as land acquisition delays, insufficient staff, and receiving delays. Despite the strong pipeline of projects, challenges like site acquisition delays, insufficient labour, delays in acquiring essential licences, and rising construction material prices may pose a danger to the industry’s outlook in 2023. However, the industry still seems optimistic about the opportunities being forayed with this massive economic accommodation.

According to Sunil Puri, Managing Director, India and SAARC Operations, CASE Construction Equipment, “infrastructure development is one of the seven key sectors in the union budget plan.” “By targeting 50 new airports and allocating ₹2.7 lakh crore for road infrastructure and ₹2.4 lakh crore for railways, the government is putting the correct emphasis on infrastructure development, as it has in prior years.”

“The inclusive, growth-oriented budget builds based on prior years and is consistent with the government’s goals to preserve macroeconomic stability while concentrating on growth,” says Sunil Mathur, Managing Director and Chief Executive Officer, Siemens Limited, India. Increased capital infrastructure investments, such as “green growth,” sustainable communities, and railway and transportation systems, will provide the domestic economy with a much-needed boost.

“Overall, the Indian construction sector has many reasons to applaud this budget,” says Harsh Pareek, Regional Sales Director, India and SAARC, Trimble Solutions, citing the prospects for technology. “The increased capital spending, currently at 3.3 percent of GDP, and the enhanced allocation for the PM Awas Yojna, will significantly boost urban housing and infrastructure development.”

“Adoption of green fuel, energy, construction techniques, and eco-friendly building materials to minimise carbon intensity would be the next step in decreasing energy consumption in building ecosystems,” says Ashwin Reddy, Managing Director, Aparna Enterprises Ltd.

The emphasis on green infrastructure is a good move that creates the groundwork for adopting green structures employing pre-engineered technology, which will aid in fulfilling development targets faster and more cost-effectively, according to Nikhil Bothra, Director, EPACK Prefab.

According to Kshitish Nadgauda, Senior Vice President and Managing Director of Louis Berger WS, “the development of an infrastructure finance secretariat would further assist in recruiting more private investment and simplifying public-private partnerships”.

Santhanam, CEO of Saint-Gobain Asia Pacific and India Region and Chairman of Saint-Gobain India, believes that this budget “would serve as the template to make India self-sufficient and generate long-term economic growth with ecological sustainability.”

The infrastructure capital budget of ₹10 lakh crore or 3.3 percent of GDP is projected to have a multiplier impact across industries and provide the groundwork for long-term growth. Measures and efforts are taken to make municipal, and state finances more feasible would allow them to incur more significant expenditures and, in the long term, make them financially sound.