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Big Infra Spending To Set Ball Rolling For $5 Trillion Economy
The Union Budget reflects the government’s goals to provide a boost to the real estate infrastructure
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The highlight OF Union Budget 2022-23 was its focus on infrastructure. The investments in the infrastructure space always have a cascading effect on other sectors as well. Set on the fulcrum of PM Gati Shakti National Master Plan, the Budget featured plans to expand National Highway Network by 25,000 km, with an outlay of ?20,000 crore via financing. It also encompasses seven engines of multimodal connectivity for states with speedier implementation of projects through the use of technology. This will have an impact on other aligned sectors and give impetus to seamless connectivity, employment and growth of tourism.
Improved logistics infrastructure is always going to translate into significant growth potential. And the government’s plans to realise their vision of an Atmanirbhar Bharat in this segment include bringing 2,000 km of the rail network under the indigenous world-class technology Kawach. The targets also feature plans to manufacture 400 new `Vande Bharat’ trains & develop 100 cargo terminals in the next three years. The development of this transit-oriented infrastructure will also create employment opportunities.
The impact of the PM Gati Shakti-centric infrastructure will also impact the real estate sector, which also featured some major reforms. Among the many announcements for the sector include the one on affordable housing and striking a balance in development of mega-cities as well as tier-2 and tier-3 cities. This has ensured that the Budget has delivered on most expectations from the real estate sector. There is a positive buzz following the announcements, as the pandemic and the subsequent lockdown had brought the real estate sector to a grinding halt with shortage of labour due to migration, bringing construction activities to a stop in many parts of the country. The Budget plans for this year seems set to change all that.
With the plans to bring in reforms in the urban sector policies, capacity building, implementation and governance, the Budget reflects the government’s goals to provide a boost to the real estate infrastructure. The Finance Minister announced that 80 lakh homes would be completed in FY23 under the PM Awas Yojna (PMAY). This will be a boon to the economically weaker section as there is a shortage of 10 million houses in India. The Finance Minister has allocated around Rs 48,000 crore for this scheme, which will have a positive impact on a sector that contributes around 7 per cent to India’s GDP and employs roughly around 54 million people. There are also around 125 industries that are directly and indirectly dependent on it.
The fact that the government is heading in the right direction is evident in its plans to set up a high-level committee of urban planners and institutes to formulate policies for sustainable urban development. It is also focusing on not just enhancing on the development of mega-cities, but also that of tier-2 and tier-3 cities, which is heartening as it is ensuring sustainable living along with ease of doing business. The Finance Minister has also announced the replacement of the Special Economic Zone (SEZ) Act with a new legislation and also stressed on digitisation of land records. These are welcome moves as it will help to streamline the sector and help states to collaborate and create enterprises and service hubs.
Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.