In the Union Budget for 2024-2025, Finance Minister Nirmala Sitharaman announced a substantial commitment to infrastructure development, emphasizing both public and private investment. The government aims to sustain and accelerate infrastructure growth, recognizing its critical role in economic development.
Public Investment in Infrastructure
Significant Allocation for Capital Expenditure:
The Finance Minister announced an allocation of ā¹11,11,111 crore for capital expenditure, representing 3.4% of GDP. This investment is intended to trigger a multiplier effect, stimulating economic activity and creating jobs. Over the next five years, the Centre will continue to make significant infrastructure investments.
State Support for Infrastructure Development:
The government will encourage states to provide similar support for infrastructure development based on their specific priorities. This collaborative approach aims to ensure comprehensive and region-specific infrastructure growth across the country.
Promoting Private Investment
Viability Gap Funding (VGF):
To attract private investment in infrastructure, the government will promote Viability Gap Funding. VGF is designed to make infrastructure projects financially viable by providing upfront capital grants to support projects that are economically justified but fall short of financial viability.
Market-Based Financing Framework:
A new market-based financing framework will be introduced to facilitate private investment in infrastructure. This framework aims to leverage market mechanisms to mobilize private capital, ensuring a steady flow of investment into critical infrastructure projects.