Infrastructure Sector Calls for Reforms Ahead of Union Budget 2025
New Delhi, January 28: As the Union Budget 2025 approaches on February 1, stakeholders in the infrastructure sector are advocating for several key measures. They are urging for the rationalization of GST, tax incentives for green building technologies, increased capital expenditure (capex) for roads, railways, and ports, enhanced support for public-private partnerships (PPPs), and skill development initiatives to fill workforce gaps in construction and infrastructure.
Industry representatives from various segments, including construction, real estate, transportation, and urban development, have stressed the necessity for fiscal reforms and policies that alleviate the financial pressures on infrastructure projects. Arvind Nanda, Managing Director of Interarch Building Products, underscored the significance of tax relief, especially for pre-engineered buildings (PEBs) in industrial projects. He stated, “Extending Input Tax Credit (ITC) benefits for PEBs would lower project costs, promote eco-friendly building solutions, and drive industrial advancement.” Nanda also advocated for increased investments in skill development under the ‘Skill India’ initiative to bridge talent shortages in the construction sector.
Bhagat Singh, Group CFO of Ceigall India Limited, emphasized the need for enhanced infrastructure funding, revitalization of private sector involvement, and the development of green infrastructure. He noted, “Encouraging investments in renewable energy, skill development, and the adoption of green technology will ensure that infrastructure growth aligns with the nation’s sustainability objectives.”
Vivek Iyer, Partner at Grant Thornton Bharat, highlighted the importance of rationalizing capital expenditure schemes across states to promote balanced growth. He suggested adjusting allocations based on the specific developmental needs of different states, aligning fiscal policies with long-term infrastructure goals. “The Centre’s Capital Expenditure scheme for states, which includes a 50-year interest-free loan, aims to foster sustainable and balanced growth within states, ultimately contributing to national development,” Iyer added.
In the transportation sector, Ashish Suman, Partner at JSA Advocates and Solicitors, anticipates an increase in capex allocations for roads, highways, and ports. He remarked, “A capex increase of up to 10 percent for the roads sector, along with a stronger emphasis on Build-Operate-Transfer (BOT) projects, would encourage private investment and enhance infrastructure development.”
Regarding urban infrastructure, the focus is on revitalizing public-private partnerships (PPPs) to enhance funding for Tier 2 and Tier 3 cities. Suman pointed out the stagnation in PPP investments in urban infrastructure and called for innovative models to boost private sector participation. He recommended better utilization of the Urban Infrastructure Development Fund (UDIF) and strengthening the municipal bonds market to tackle the funding challenges faced by urban local bodies (ULBs).
