The allocation for capital expenditure has been pegged at Rs 10 lakh crore in 2023-24, up from Rs 7.5 lakh crore in 2022-23. The Budget has doubled down on the government’s strategy to drive investment activity in the economy. The Finance Minister has also extended the facility of an interest-free loan to states for capex.

The Finance Minister said the government will continue 50-year interest-free loans to state governments for one more year to aid infrastructure investment with an outlay of Rs 1.3 lakh crore. The thrust on capital expenditure will continue for FY24. Centre’s capital expenditure outlay for FY24 has been hiked to Rs 10 lakh crore, an increase of 33% year-on-year.

Considering that states, put together, account for a sizeable share of public investments, this is an encouraging sign for investment activity.

FM also announces 50 additional airports, water aerodromes, and landing grounds to be revived for regional air connectivity. This should offer additional push to the regional connectivity scheme, which started with the UDAAN scheme.

Rural Infrastructure Development Fund (RIDF), Urban Infrastructure Development Fund will be set up for the use of priority sector lending shortfall. The Budget proposes to set aside Rs 10,00 crore per annum for this purpose. It will be managed by National Housing Bank (NHB).

An Urban Infrastructure Development Fund (UIDF) will be set up for Tier 2 and Tier 3 cities and ₹10,000 crore is expected to be allocated for it annually.

She said all cities and towns will be provided 100% mechanical support for the desludging of septic tanks and sewers to transition from manhole to machine-hole mode. “Enhanced focus will be provided for scientific management of dry and wet waste.”

She said that urban local bodies will be provided incentives to improve their finances and creditworthiness.