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Views on how the Budget 2024 was positive for companies catering to Energy Transition themes, Railway Transportation and Logistics sector by Mr. Sandeep Upadhyay, Centrum Capital

Budget speech is broadly in line with the Industry expectation, announcing a 11.1% increase in the Infrastructure outlay. While the exuberance one has seen in the capital outlay over last 2-3 years has tapered down but one can relate to it given this is an “interim” budget, however the intentions of continued Capex and pursuing innovative development models was evident. The capital outlay announced is 3.4% of the GDP and in line with the Viksit Bharat vision earlier outlined by the Government.

The announcement towards developing three major Railway corridors centred around Industrial themes (Energy, Mineral and Cement), Port connectivity and High density traffic corridor is a key step towards improving the railways connectivity aiming at significantly reducing the high logistics costs in comparison to global benchmarks. These Capital intensive railway connectivity projects have been identified under the PM Gati Shakti initiative for improving multi modal connectivity to further compliment the development of Dedicated Freight Corridor, enabling faster economic development as well as generating significant employment opportunities. This is a major positive for stakeholders catering to Railway, logistics and Urban mobility space. Announcements pertaining to upgrading Railway infrastructure with emphasis on improving safety, convenience and comfort of passengers is a key takeaway from FM’s speech during which she also emphasized on improving air connectivity through thematic transit oriented development.  

In line with GOI’s push towards energy transition and in pursuit of the Net Zero commitment by 2070, FM announced Viability Gap Funding (VGF) model to harness offshore wind energy potential for an initial capacity 1 GW. Interestingly, this VGF model has resulted into creating a major traction within the Road sector and has been effectively used to develop PPP projects under the Urban Infrastructure sectors. Covering the PM Suryodaya Yojana as a part of her speech, FM shared Government expects approximately One crores households will be beneficiaries resulting in Savings upto INR 18000 annually and the surplus power generated to be sold to distribution companies. India is now well placed amongst the leaders in generating grid-connected solar power with one of lowest tariff rates globally, however the solar rooftop potential is still widely untapped. The announcement by FM today reinforces the vision of the Government to tap into the solar rooftop segment and is potential to have an overall “mass impact”. In order to step up the Electric Vehicle ecosystem in India the announcement of creating entrepreneurship opportunities for domestic suppliers and vendors for installation and maintenance of EV chargers can been seen as a smart move aligned to Government’s mission of upskilling youth with technical expertise besides creating new avenues for employment.       

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