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Union Budget 2024-25: Infrastructure Initiatives
Context
In the Union Budget, Finance Minister Nirmala Sitharaman announced a significant boost in infrastructure spending, highlighting its pivotal role in driving economic growth and improving living standards across India.
Key Highlights:
- Infrastructure Spending Surge:The government has allocated Rs 11,11,111 crore for capital expenditure on infrastructure, equivalent to 3.4% of the GDP. This marks a doubling of infrastructure spending from 1.7% of GDP three years ago.
- Support to State Governments:A provision of Rs 1.5 lakh crore has been made for interest-free loans to state governments, aimed at bolstering their infrastructure investments.
- Pradhan Mantri Gram SadakYojana (PMGSY):Under Phase-4 of PMGSY, the government plans to provide all-weather connectivity to 25,000 rural habitations, enhancing rural accessibility and connectivity.
- Accelerated Irrigation Benefit Programme:A support of Rs 11,500 crore has been earmarked for projects like the Kosi-Mechi intra-state link under this programme, aiming to improve irrigation infrastructure and agricultural productivity.
- Special Packages for North and Northeastern States:Assam, Himachal Pradesh, Uttarakhand, and Sikkim will receive assistance for flood management and recovery from natural disasters like cloud bursts, flash floods, and landslides.
- PM AwasYojana - Housing for All:The government has committed to constructing three crore additional houses under PM AwasYojana in both rural and urban areas, ensuring adequate housing for all sections of society.
- Rural Development and Infrastructure:An allocation of Rs 2.66 lakh crore has been set aside for rural development, including infrastructure projects, aimed at improving connectivity, healthcare, education, and economic opportunities in rural India.
Multiplier Effect of Infrastructure:
Infrastructure development plays a crucial role in stimulating economic growth and improving overall quality of life. The multiplier effect of increased infrastructure spending includes:
- Industry Boost: Improved infrastructure enhances productivity and efficiency across industries, fostering economic growth and job creation.
- Connectivity: Enhanced connectivity through better roads, railways, and digital infrastructure facilitates smoother movement of goods and people, reducing logistical costs and improving trade efficiency.
- Quality of Life: Upgraded infrastructure, including better healthcare, education facilities, and housing, directly contributes to an improved quality of life for citizens.
- Economic Development: Infrastructure investments act as catalysts for economic development by attracting private investments, boosting consumer spending, and supporting entrepreneurship.
- Resilience and Sustainability: Modern infrastructure strengthens resilience against natural disasters and climate change impacts, ensuring sustainable development in the long term.
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