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The increase in the infrastructure capital outlay in the interim Budget to ₹11.11-lakh crore in FY2024-25 will bring in private investments.
According to experts in the infrastructure industry, the spike in investments with a capital outlay of ₹11.11 lakh crore will be across sectors.
“Allocating 11 per cent additional outlay for Infrastructure development spells continuity of investment-led growth model,” said R Shankar Raman, CFO and whole time director of Larsen &Toubro.
“The increased capital expenditure constituting 3.4 per cent of the GDP, bodes well for the infrastructure-led GDP growth and will also crowd in the private sector investments as we are now witnessing improvements in consumer sentiments (and demand),” said Anil G Verma, Executive Director and CEO of Godrej & Boyce.
Demand for raw materials is also expected to see an uptick with the increase in capital outlay, “There is an 11.1 per cent increase in capital expenditure for infrastructure, taking the total outlay to ₹11.1-lakh crore. However, if we look at the likely spending in FY24, it will be about ₹9.5 lakh crore. Essentially, the increase will be about 17 per cent in real terms. This should translate into robust domestic steel demand, spurring private investments and job creation. The emphasis on building all forms of infrastructure – digital, social, and physical at an unprecedented pace is promising,” said Dilip Oommen, President of the Indian Steel Association and CEO of AM/NS India.
The commercial vehicle industry which is expected to grow by 4 per cent in FY2024 according to industry estimates will also witness a demand uptick
The additional outlay will also benefit the commercial vehicle industry which is expected to grow by 4 per cent in FY2024 as per industry estimates.
“The most prominent takeaway for me was the capital expenditure outlay of ₹11.1 trillion towards infrastructure development. I would consider this to be indicative of a boom for the commercial vehicles industry in the near term,” said Satyakam Arya, Managing Director & CEO of Daimler India Commercial Vehicles.
- Also read: Finance Minister’s Interim Budget speech
“Increased focus on infrastructure development augurs well for commercial vehicle demand, especially multi-axle vehicles and tippers,” said Shamsher Dewan, Senior Vice President & Group Head - Corporate Ratings of ICRA Ltd.
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