DECODING BUDGET 2018!

On February 1, Union Minister for Finance, Arun Jaitley laid out plans for the future of India’s economy in the Union Budget of 2018. The total capital outlay for infrastructure sector has been budgeted to increase by 20.8 per cent to Rs. 5.97 lakh crore in 2018-19. Apart from the core railways, and roads, the special focus of this budget has been on rural infrastructure through development of rural roads, houses, sanitation, irrigation and water supply which will provide a significant boost to the rural economy. To meet the government’s target of Housing for All by 2022, the Budget announced construction of an additional 51 lakh houses in rural areas. Similarly, capital outlay under PMAY (Urban) has been increased sharply, which includes assistance for constructing 37 lakh homes in urban areas. “The budget emphasised on the completion of on-going high priority irrigation projects and increased allocation under PMKSY-AIBP. It also provided direction on the long-term projects being undertaken under Smart Cities mission and AMRUT programme,” according to rating firm ICRA. So far, out of 100 cities planned for upgradation under Smart Cities Mission, 99 cities have been selected. The programme will involve capital outlay of Rs 2.04 lakh crore (projects worth Rs 2,350 crore completed and works of Rs 20,852 crore under progress). Similarly, under AMRUT programme, state level plans for providing water supply in 500 cities with capex of Rs 77,640 crore have been approved. “Deepening of bond markets is required to support long-term infrastructure financing especially given the twin challenges faced by commercial banks – asset-liability management and increasing share of stressed assets. Relaxation of rating threshold (from AA to A) is a positive as it would encourage more participation from domestic insurance companies and pension funds in infrastructure sector,” according to ICRA. CW has collated reactions from various industry players on the Budget and its impact on the various sectors. Click on the links below to read on reactions from the following: Consultants Contractors Construction Equipment Building Materials and Technology Finance Real Estate Power Miscellaneous