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Below the Quote on Budget 2024 by Mr Sandeep Upadhyay, Managing Director - Infrastructure Advisory Centrum Capital Ltd

Budget speech is broadly aligned with the Industry expectation, announcing a 11.1% increase in the Infrastructure outlay in line with the announcement during the interim budget. This capital outlay announced forms 3.4% of the GDP. While the exuberance of announcements of large Capex projects was missing however the intentions of pursuing innovative development models was evident. Viability gap funding for sustaining high Capex projects on models which are aligned to market trends essentially alludes to encouraging transition from the conservative Annuity (HAM) model to the BOT schemes in the transportation and urban infrastructure sectors. One was expecting specific announcements on Railways in continuation to the interim budget however a large capital outlay pertaining to upgrading Railway infrastructure with emphasis on improving safety, convenience and comfort of passengers is already in place as per the interim budget announcement. Thrust on major transportation infrastructure including Airports and Highways and logistics connectivity projects in Bihar was not a surprise, with further involvement of multi-lateral funding agencies expected to fund the Capex in the state. Further Gaya has been identified as node for developing a major industrial corridor for boosting development in the east. Creative re-development of cities shall essentially form the basis of brownfield development of Urban Infrastructure projects across India in partnership with the states.        
 
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. Reiterating the success of "Pradhan Mantri Suryaghar Yojana" FM's budget speech suggested that this initiative aims to enable 1 crore households to obtain free electricity of 300 units every month has already seen 1.28 crore registrations and 14 lakh registrations. The announcement by FM today reinforces the vision of the Government to tap into the solar rooftop segment and its potential to have an overall “mass impact”. Focussing on the energy transition theme a detailed policy on Pumped storage projects can be expected soon in the coming days potentially proving a major fillip to the capacity addition in the renewables sector.  Lastly, emphasis on improving the efficiency of the resolution process through IBC, an overhaul driven by an integrated tech enabled platform is a refreshing approach and I am eager to see the finger prints of the same. This may lead to speedy resolution and expedite investments into some of the core sectors including Infrastructure which forms a large part of the companies seeking resolution through NCLT.
 
Overall Comment:

“The intention expressed in the budget speech is to attract increased funding for capital expenditure in the infrastructure sector through innovative financing mechanisms. This includes encouraging the private sector to participate more actively, supported by viability gap funding provided by the government. I foresee a gradual shift from solely relying on Annuity models and cash contracts, which have been predominant in capacity addition in recent years. This shift aims to diversify financing sources and stimulate greater investment in infrastructure projects across the country”

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