Budget Decoding 2022-

23 Group members-
Shloka Kulkarni
Pooja Sawant
Infrastructure Archit Sood
Aditya Kadale
Sarthak Gupta
INTRODUCTION
• Union Budget 2022-23
• The Budget goals for FY2022-23 aim to further India's aspirations in Amrit Kaal, as it moves towards its 100th
year post independence.
• Focus on growth and all-inclusive welfare
• Promoting technology-enabled development, energy transition and climate action
• Virtuous cycle starting from private investment, crowded in by public capital investment
• The Union Budget for FY 2022-23 this year aims to strengthen the infrastructure with its focus on four
priorities of:
• PM GatiShakti
• Inclusive Development
• Productivity Enhancement & Investment, Sunrise opportunities, Energy Transition, and Climate Action
• Financing of investments
• The Union Budget website lists the Highlights of the FY 2022-23 Budget. The Press Information Bureau (PIB)
website provides a summary of the Budget. The Productivity Linked Incentive in 14 sectors for achieving the
vision of AtmaNirbhar Bharat has received excellent response, with potential to create 60 lakh new jobs, and
an additional production of Rs 30 lakh crore during next 5 years.
INTRODUCTION OF BUDGET FOR
INFRASTRUCTURE
• State governments are likely to play a larger role in sectors like urban infrastructure, irrigation, health and
education, which fall under their jurisdiction. To incentivise them to augment infrastructure in these sectors,
the budget has significantly increased the outlay for “State Government Support for capital expenditure”
from Rs 15,000 cr in 2021-22 to Rs 1 lakh crore in 2022-23. This amount would be given to the States through
a 50-year interest-free loan and would be over and above the concessional finance introduced earlier for
undertaking specific reforms under Atmanirbhar Bharat, asset monetisation, etc.
• On private investments, a number of initiatives around public private partnerships, asset monetisation,
setting up of the National Bank for Infrastructure & Development (NABFID) as a development finance
institution, tax concessions for foreign pension and sovereign wealth funds have already been introduced.
The budget additionally highlights green bonds as well as thematic funds leveraging blended finance for
financing sunrise sectors like deep tech, climate action, pharma, agri-tech, etc.
• However, a number of policy reforms are essential for creating a sustainable private investment eco-system,
many of which are outside the purview of the budget. Examples include increasing domestic pension fund
investments in infrastructure, expanding the definition of infrastructure investors for tax purposes,
deepening the infrastructure bond market, mobilising long-term resources through higher pension coverage,
adopting standard templates & practices for selecting and contracting with private partners, and putting in
place effective contract renegotiation & alternate dispute resolution mechanisms.
• While Budget 2022-23 reinforces the Union government’s commitment to infrastructure development,
timely implementation of the aforementioned measures would be critical for putting a robust extra
budgetary financial eco-system in place.
Key Highlights of the Budget- 2022-23
(Infrastructure)
• Capital expenditure funding is at an all-time high: From Rs 4.39 lakh crore in 2021, a substantial
increase in capital expenditure of 5.54 lakh crore is proposed.
• The National Infrastructure Pipeline now has 7,400 projects in its pipeline. The National Infrastructure
Pipeline has completed 217 projects worth over INR 1 lakh crore.
• The government has set aside INR 1.97 lakh crore for PLI programmes in 13 different sectors.
• In order to improve India's textile competitiveness globally, the Mega Integrated Textile Regions and
Apparel Parks (MITRAs) programme would be implemented alongside PLI, resulting in world-class
infrastructure with plug-and-play facilities. In the next three years, seven giant textile parks will be
built.
• The government will promote the creation of a world-class fintech cluster at GIFT, as well as the
introduction of an investor charter.
• In the coming fiscal, INR 40,000 crore would be allocated to rural infrastructure development, up
from INR 30,000 crore in the previous fiscal.
• Foreign investors will be able to invest more easily in India's infrastructure projects thanks to policies
that make it easier for them to do so. Proposal to exempt REIT (Real Estate Investment Trusts)
and InvITs (Infrastructure Investment Trusts) dividend payments from TDS (Tax Deducted at Source)
(TDS).
 Infrastructure for roads and highways:
• An additional 8,500 kilometres (kilometres) of • In Assam, 1,300 km will be built in the next
National Highways will be awarded by March three years.
2021, with work on 11,500 kilometres of
National Highway corridor expected to be • Vehicles will be tested for fitness at automatic
finished this year. The following are examples of fitness centres on a voluntary basis under the
planned economic corridors. Voluntary Vehicle Scrapping Policy. All private
vehicles above the age of 20 and commercial
• In Tamil Nadu, INR 1.03 lakh crore would be
vehicles over the age of 15 will be subjected
spent on the development of 3,500 kilometres
of national highways, including the Madurai- to a fitness test.
Kollam Corridor. • InvIT was funded by the National Highway
• In Kerala, INR 65,000 crore would be spent on Authority of India (NHAI) and will be launched
the construction of 1,100 kilometres of national with five operational toll highways.
highways, including 600 kilometres of new • The government would spend INR 18,000
highways. crore on public buses.
• In West Bengal, INR 25,000 crore would be • In all new four and six lane highways,
spent on the creation of 675 kilometres of advanced traffic management systems with
highway, including the upgrade of the current speed radars, variable message signboards,
Kolkata-Siliguri road. and GPS-enabled recovery vans will be
deployed.
 Major Highways and Corridors:
• The remaining 260 kilometres of the Delhi-Mumbai Expressway will be awarded by March
31, 2021.
• The 278-kilometer Bengaluru-Chennai Expressway will be completed this fiscal year.
Construction is expected to commence in 2021-22.
• The 210-kilometer Delhi-Dehradun economic corridor will be launched this fiscal year.
Construction is expected to commence in 2021-22.
• Kanpur-Lucknow Expressway: A 63-kilometer expressway connecting Kanpur and Lucknow
will open in 2021-22, giving an alternative to NH 27.
• The 277-kilometer Chennai-Salem highway will be awarded, and building will begin in 2021-
22.
• In the current year, the Raipur-Vishakhapatnam route, which runs through Chhattisgarh,
Odisha, and North Andhra Pradesh, would be granted. Construction is expected to commence
in 2021-22.
• Construction of the Amritsar-Jamnagar highway will begin in 2021-22.
• Construction of the Delhi-Katra highway will begin in 2021-22.
 • By June 2022, the Western
Dedicated Freight Corridor
• After commissioning, railways will and the Eastern
monetize dedicated fright corridor Dedicated Freight Corridor
assets for operations and will be operational.
The Sonnagar-
Railways: maintenance.
• Railway expenditure of INR 1.10
Dankuni segment will be
built under a Public-Private
lakh crore, of which Rs 1.7 lakh Partnership (PPP).
crore is for capital investment.
• The whole length of the
• Kochi Metro, Chennai Metro, broad-gauge network was
Bengaluru Metro, Nagpur Metro, electrified to 72 percent, up
and Nashik Metro projects have from 65 percent the
received federal support. previous year.
• Metrolite/Metroneo systems are • Vistadome is
less expensive to deploy and a modernised version of the
provide more comfort and traditional Vistadome.
convenience. Coaches from Linke Hofmann
• Create a future-ready railway Busch (LHB) ensure a
infrastructure to lower industry's safer journey.
logistics costs as part of the 'Make • On high-density roads, an
in India' plan, according to the indigenously created cutting-
National Rail Plan 2030. edge anti-collision
technology reduces
manual errors.
Aviation

• According to the document provided by Finance Minister Nirmala Sitharaman, the

Union Budget has earmarked Rs 10,667 crore for the civil aviation ministry for the
fiscal year 2022-23.
• The regional connectivity scheme UDAN (Ude Desh ka Aam Naagrik) will receive Rs
600.7 crore, while AI Asset Holdings Limited will receive Rs 9,259 crore to service the
loans transferred to the special purpose vehicle (SPV) for Air India's financial
reorganisation.
• According to the Budget paper, a total of Rs 165 crore has been made aside for the
medical benefits of retired Air India employees.
• While most Indian airlines and airport operators applauded the government's call for
infrastructure development and greater capital expenditure allocation, many were
dissatisfied by the government's lack of support for the sector.
 Positive Impacts

• The implementation of these projects will not only augment

connectivity but also yield enormous benefits for India's logistics sector
and the positive ripple effects on the construction industry as a result of
execution of these projects will be an added advantage.
• A proper and prompt implementation of the laudable Budget
announcements will not only lead to the creation of a world-class
modern infrastructure but will also create employment opportunities.
• Directly or Indirectly all the sectors are depend on  infrastructure, after
implementation of these projects it will lead to  rise in GDP of the
country.
• Introduction of metro rail system will reduce the problem of traffic and
air pollution in tier 1 and tier 2 cities. 
• This is likely to have a multiplier effect on the core sector industries like steel and
cement. 
• The further push on infrastructure will generate demand at multiple levels, which lead
to rise in production and generate employment opportunities.
• Introduction of 400 Vande Bharat trains and Vistadome coaches will give impetus to
covid hit Tourism and Hospitality Sector .
• It will cut down logistics cost which will help in rise of FDI , and attract foreign and
domestic companies to set up industries . It will also boost the vision of Atmanirbhar
Bharat.
• Construction of new highways and roads will decrease the travelling time which will
lead to fuel saving and decrease in  carbon footprints.
• These Projects will also help poor regions of the country in economic and
sustainable development
• Agriculture  sector will also get benefit as farmers will get easy access to big markets
for their crops.
Limitations of budget for infrastructure 2022-23

• Investment in public infrastructure- There is no doubt that high-quality public infrastructure supports economic
growth, generates jobs, and improves the well-being of the citizens. The budget proposes investment in national
highway projects, especially for the four poll-bound states (namely, Assam, Kerala, Tamil Nadu, and West Bengal),
road transport, and power distribution, among others. Yet, infrastructure investment is complex, and getting from
conception to construction and operation, is a long road fraught with obstacles and pitfalls. Poor governance is a
major reason why infrastructure projects often fail to meet their timeframe, budget, and service delivery objectives,
and often get stalled. As such, it is argued that the strong ‘multiplier effect' of infrastructure spending can be
realised, only if it is delivered in a timely manner and is effectively targeted. 
• Meeting these criteria may, however, be a challenge, especially during a recession triggered by the "2020-
21 pandemic" . Infrastructure construction projects take a few quarters to a few years to even get off the ground
due to implementation lags in planning and permissions, including environmental permits, and issues of land
acquisition. This means that the boost to infrastructure investment may not be well-timed and may actually
amplify, rather than smoothen, economic cycles.
• However, sectors that have been most adversely impacted by the pandemic, such as exports and tourism, including
many micro, small and medium sized firms (MSMEs), are not easily reached through this stimulus. Furthermore,
investment in infrastructure is highly localised – there is no reason to expect that the regional distribution of
infrastructure needs will necessarily coincide with the geographic distribution of its impact.
Limitations of budget for infrastructure 2022-23
-  Continuation 

• Another big limitation faced by large infrastructure companies is the sourcing of raw materials such as
steel.  Earlier, the infrastructure companies were required to procure steel from primary producers
who charged a premium, therefore driving up costs for the industry as a whole. Recently, the ministry
of steel released a clarification stating that the raw material can be procured from any producer.
However, the implementation of such guidelines needs a great push in order to boost the industry’s
growth by reducing the cost of raw materials. Furthermore, the price fluctuations on raw materials
tend to delay the completion of infrastructure projects while slowing down the entire sector’s
growth. Providing relief on procurement of raw materials can result in expediting the delivery of the
projects, thereby, accelerating the growth of the sector. 
• Any sector that needs a strong push needs to identify the roadblocks and come up with a solution for
its progress. In the infrastructure industry, one of the biggest hurdles is incomplete projects. These
are usually left for too long in the last stage of development and the completion of them would make
way for new projects as well as provide support for them. This case is evident especially with physical
infra projects such as roadways and railways. Focus on physical infrastructure projects will make the
movement of resources easier and also provide aid to logistics. 
COMPARISON

• With over 35% y-o-y increase in capex and a proposed infrastructure

spend of over Rs 10 lakh crore in Budget 2022-23, the Union
government has reinforced its commitment to using infrastructure as a
force multiplier for sustained economic growth. 
• In terms of investments, roads and railways have seen a significant
increase in outlays, with y-o-y increase of over 50%.
• The proposed spend on urban infrastructure, housing and ports has
been maintained at FY2021-22 levels, with the outlay on Jal Jeevan
Mission increasing by 20%.
THANKYOU!