Expectations From Infrastructure Sector | Union Budget 2021

Deepto Roy, Partner, Shardul Amarchand Mangaldas & Co. Infrastructure sector needs budgetary support across the short and medium term. Though not as badly affected as other sectors, the pandemic driven lockdown has enhanced some of the systemic stress w

BY Realty Plus
Published - Thursday, 21 Jan, 2021

Expectations From Infrastructure Sector | Union Budget 2021

Deepto Roy, Partner, Shardul Amarchand Mangaldas & Co. Infrastructure sector needs budgetary support across the short and medium term. Though not as badly affected as other sectors, the pandemic driven lockdown has enhanced some of the systemic stress which already existed in the sector. Equally, focused and committed spending on infrastructure is necessary to address the economic malaise. Infrastructure expenditure has a multiplier effect on the economy, which needs to be harnessed. In particular, in generates employment on a large scale, encourages a plethora of ancillary industries, and also has a long lasting impact on the demand supply eco-system. The Central Government did use the pandemic situation to pass a slew of reforms in infrastructure, including mining. A priority should be the passage of the extensive amendments to the Electricity Act, which are long overdue. Given that private sector investment will be relatively sluggish, the Government will have to step in and ensure robust expenditure. At the same time, there are concerns about growing private monopolization of infrastructure, which needs to be addressed. Increased short-term spending, focused project specific development, while keeping an eye on long term strategic reforms should be the strategy that the Government needs to adopt.