Infrastructure sector is one of the key industry segments of the Indian economy. It is highly responsible for propelling India’s overall development and it has a huge impact on various other allied sectors including construction and Construction Equipment (CE) among others. It is for the same reason that the sector enjoys intense focus of the government. Particularly, the present government has been focussing much on the overall infrastructure development in the country. This is quite evident from the ambitious infrastructure projects being launched and increased budgetary allocations to infrastructure segment that the government is making since the time it came into power.

Generally, infrastructure sector includes power, bridges, dams, ports, railways, roads, real estate and urban infrastructure development. All the sub-segments of infrastructure have been receiving equal focus from the government in past few years.

Infrastructure initiatives taken by government in Budget 2019-2020:

If we particularly talk about the recent Budget 2019-2020, then it saw increased budgetary allocation by the government to boost the infrastructure segment of the country. Here is a look at all those actions and steps of the government...

1. A total of Rs 4.56 lakh crore was allocated to the infrastructure sector which included roadways, railways and aviation segment.

2. Railways received a budgetary support of Rs 66,768.67 crore, up from Rs 55,135 crores and saw 21 per cent increase.

3. A big sum of Rs 1,58,658 crore was allocated as the capital expenditure for the railways, up from Rs 1,38,857.52 crore in 2018-19.

4. The roads sector was allocated a sum of Rs 83,015 crores.

5. An upgraded allocation of Rs 19,000 crore was made on rural roads under the Pradhan Mantri Gram Sadak Yojana (PMGSY) from a sum of Rs 15,500 crores in 2018-19.

6. The shipping industry received an allocation of Rs 1902.56 crores. Furthermore, Rs 550 crore was allocated for port and coastline development under the flagship programme named ‘Sagarmala’, as against Rs 381 crore in 2018-19.

7. The aviation sector was allocated Rs 4500 crore.

Other initiatives by the government

Not only the 2019-2020 budgetary allocation has given a momentum to the infrastructure sector but various other initiatives of the government that it took earlier for the future are having a huge and positive impact on the sector’s growth. These steps include:

1. The biggest ever Highway Development Plan to construct 83,677 kms of roads at an investment of Rs 6.92 lakh crore by 2022 is approved and being implemented. It includes the Bharatmala Pariyojana which aims to build 66,100 km of economic corridors, border and coastal roads and expressways to boost the highway network in the country.

2. Under the Bharatmala Pariyojana Phase-I, a total of 34,800 kms including the balanced road works under the National Highways Development Project (NHDP) are to be completed by 2021-22.

3. $ 82 billion will be invested by the government by 2022 under Bharatmala Pariyojana.

4. A total of 200,000 km national highways are expected to be completed by 2022.

5. Government has decided to invest Rs 7 trillion (US$ 107.82 billion) for construction of new roads and highways over the next five years.

6. Government is also planning to upgrade 10,141 kms of roads in the North-East region through three-phased Special Accelerated Road Development Programme which aims to improve road connectivity in all district headquarters in the North-Eastern region. Phase A of the project includes upgradation of 4,099 kms of road by March 2021.

7. Under the ‘Housing for all by 2022’ scheme, the government is aiming to develop about 11 crore houses.

8. The government is also aiming to develop 98 smart cities in the country.

9. In May 2018, India signed a USD 500 million (Rs 3,371 crore) loan pact with World Bank to provide additional financing for PMGSY rural road projects to build 7,000 km of climate-resilient roads.

Thus, by analysing the present budgetary allocation to the infrastructure sector and various other steps taken in the past, it is quite evident that the infrastructure sector is set to see a major boom in the time to come. This trend will definitely increase the demand for CE. This is because more and more CE would be required to complete the infrastructure projects on time.

Impact of the infrastructure development on CE demand

All the above-mentioned steps taken by the government for overall infrastructure development in the country will clearly have a positive impact on the construction and CE sector. Be it the construction of railway or aviation infrastructure, development of highways and rural roads or any other infrastructure development, construction industry will receive a major boost and particularly, CE industry will smile its way to glory.

Well, expecting an unprecedented growth of the CE segment, the manufacturers in the segment are not leaving any stone unturned to cater to this growing demand. In fact, well-known players in the CE segment like Mahindra Construction Equipment (MCE) with its flagship Mahindra EarthMaster backhoe loaders and Mahindra RoadMaster motor graders are gearing up well to embrace the projected growth of construction and the CE sector with grace. It is doing so by diversifying its range of offerings, introducing newer variants of the existing line-up and launching more innovative and environment-friendly products and services for the customers.

In a nutshell

With the government realising that infrastructure is the backbone of the nation’s development and quality of life, the focus on infrastructure is drastically increasing. This is having a direct impact on CE sector. Thus, a bright future of the CE sector can be clearly seen, especially after looking at the budgetary allocation to infrastructure sector in the Budget 2019-2020.