The Union Budget 2024 was presented by Finance Minister Nirmala Sitharaman on July 23, 2024. It allocated Rs. 11.1 lakh crore for infrastructure projects, marking an 11% increase from the last year’s budget. To encourage private investment, the government plans to introduce viability gap funding, which reduces financial risks.

Additionally, the budget proposes long-term interest-free loans to state governments for developing state infrastructure. This includes plans for:

• Industrial parks
• Corridors
• Better road networks

All these projects are expected to generate jobs, improve transportation, and boost tourism. For more clarity, let’s understand the impact of Budget 2024 on the infrastructure sector by studying the top 7 announcements made.

• The Union Budget 2024 allocated an impressive Rs. 11.1 lakh crore for infrastructure (an 11% increase from the previous year).
• The major impact of Budget 2024 on the infrastructure sector is through initiatives like Transit-Oriented Development in 14 megacities and the Purvodaya Scheme for Eastern India.
• The budget also introduces "plug and play" industrial parks and twelve new industrial parks under the National Industrial Corridor Development

The government has allocated Rs. 11.1 lakh crore for infrastructure development, which is about 3.4% of India's GDP. This investment will be used to improve roads, railways, airports, and other critical infrastructure across the country. The goal is to boost economic growth by enhancing connectivity and providing better facilities. 

A major impact of Budget 2024 on the infrastructure sector includes plans for Transit-Oriented Development (TOD) in 14 major cities with populations over 30 lakhs. TOD focuses on developing areas around transit hubs like:

• Metro stations
  and
• Bus terminals

In this way, it promotes urban mobility by creating well-connected and dense urban spaces. It also aims to reduce travel time and improve the use of public transportation use.

This scheme targets affordable housing for 1 crore urban poor and the middle class. The government has allocated Rs. 2.30 lakh crore for the scheme to provide durable and all-weather homes to eligible urban residents. Also, this flagship program has sanctioned 1.18 crore houses. So far, over 85.5 lakh houses have been completed and delivered to beneficiaries.

The budget proposes the creation of 100 weekly street food hubs or 'haats' in select cities. These hubs will serve as organised spaces where vendors can sell food and other local goods. It will not only support small businesses and local vendors but also provide urban residents with safe and accessible spaces to enjoy street food.

Through this initiative, the government has tried to boost tourism and local economies by promoting street culture.

The Purvodaya Scheme focuses on accelerating the development of five states in Eastern India:

• Bihar
• Jharkhand
• Andhra Pradesh
• West Bengal
• Odisha

These states have historically lagged behind in economic growth, and the scheme aims to bring them on par with other regions. Investments will be directed towards infrastructure and industrial development. Also, efforts will be made to improve connectivity to enhance the overall development of this region. This initiative will create new jobs and improve the living standards of people residing in this area.

Another impact of Budget 2024 on the infrastructure sector is that the government plans to establish "plug and play" industrial parks in around 100 cities. These parks will provide pre-built infrastructure like utilities and transportation. Also, there will be facilities for businesses to start operations quickly.

This eliminates the need for companies to invest time in building their own infrastructure. Moreover, it is expected that this initiative will attract both domestic and international investments. As a result, this will expand manufacturing and employment.

A major impact of Budget 2024 on the infrastructure sector is the development of twelve industrial parks. These have been approved under the National Industrial Corridor Development Programme. These parks will enhance industrial growth by connecting key regions with:

• Infrastructure
• Logistics
• Manufacturing facilities

The primary goal of this initiative is to create economic hubs that are well-integrated with transport and trade networks. This will lead to faster production and more exports. Also, these corridors will boost India’s industrial capacity and drive economic growth.

The Union Budget 2024 has significantly increased capital expenditure (CAPEX) in the infrastructure sector. This move is expected to benefit equity mutual funds, especially those that invest heavily in sectors like:

• Construction
• Cement
• Steel
• Engineering

As the government boosts spending on infrastructure projects such as roads and bridges, companies involved in these areas are likely to see higher demand. This, in turn, will improve the performance of infrastructure-focused funds. Some top-performing infrastructure mutual funds in 2024 are Quant Infrastructure Fund, Invesco India Infrastructure Fund, and Bank of India Manufacturing and Infrastructure Fund.

Other than this, if we talk about individual stocks, some companies to look out for are Ashoka Buildcon, KNR Constructions, NBCC, Man Infracontruction, PSP Projects, and more.

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