How does Union Budget affect infrastructure sector?
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How does Union Budget affect infrastructure sector?
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Transcript of How does Union Budget affect infrastructure sector?
How does Union Budget affect
infrastructure sector?
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.
Roads & Bridges
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.
Airports
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.
Urban Infrastructure
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.
Power
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.
Railways
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.
Real Estate
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.
Infrastructure Finance
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.
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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The content/illustrations shared in the presentation is based on information available from
the past budget(s)
