The Growth Triad: An infrastructure push for the people
26-08-2023
11:33 AM
1 min read
Why in News?
- The article highlights the powerful thrust provided by Budget 2023 on infrastructure development with a strong focus on not just physical dimension, but also social and digital infrastructure which, put together could accelerate inclusive growth.
Summing-up Physical Infrastructure Overlay
- The Government of India’s capital expenditure as a percentage of GDP increased from 1.7 per cent in 2014 to nearly 2.9 per cent in 2022-23.
- In Budget 2023-24, Rs 10 lakh crore (3.3 per cent of the GDP), an increase of three times from 2019, was allocated for infrastructure.
- The Ministry of Railways received its highest-ever allocation of Rs 2.4 lakh crore, approximately nine times the allocation in 2013-14.
- The Ministry of Road Transport and Highways saw a 36 per cent increase in its budget to about Rs 2.7 lakh crore.
- The direct capital investment by the Centre has been further supplemented by a one-year extension of the 50-year interest-free loan to state governments.
- It aims to encourage infrastructure investment and incentivise complementary policy actions, with a significantly increased outlay of Rs 1.3 lakh crore.
What is the significance of Investments in Physical Infrastructure?
- The targeted infrastructure investments to various Ministries will help create vital physical infrastructure, jobs and spur private investments.
- It will improve connectivity that will accelerate the movement of passengers and freight.
- It will also provide a cushion against global headwinds and prevailing global slowdown.
- The extension of interest-free loans to state governments will lead to decentralized infrastructure development in urban and peri-urban areas across regions.
- For example, a 66 per cent increase in allocation to the PM Awas Yojana will not only provide housing but also create jobs in rural areas.
- Investment on infrastructure development is critical as every rupee spent on capital expenditure gives 2.95 as a multiplier.
- In contrast, the money given through revenue expenditure gets less than a rupee for every rupee spent.
- In the last eight years, one can witness the blurring of the digital divide that existed between urban and rural areas. The world has acknowledged India’s phenomenal success in building population-scale platforms at startup speed.
What is the status of digital infrastructure development in India?
- Digital transformation of India has been happening in two phases as follows:
- First phase: It started in 2015 led by the JAM trinity- Jan Dhan, Aadhaar and mobile linkages, and the Digital India programme. Few successful milestones in this phase of public digital infrastructure creation are as follows:
- Low-cost accessibility (Aadhaar), the success of citizen-centric services such as the Unified Payments Interface (UPI), large-scale adoption and reach (DigiLocker, MyGov), and the vaccine journey (CoWin) etc.
- This had benefited India’s populace through increasing penetration of government schemes and efficient financial inclusion.
- Second phase: It is now being led by the development, application, and large-scale expansion of cutting-edge technologies such as 5G, Internet of Things (IoT), artificial intelligence (AI), quantum computing, mechatronics, robotics, and more.
- For example, the Digital India Bhashini portal is a public digital platform hosting 260 open-source API -based AI models for machine translation, and text-to-speech conversion in 11 Indian languages and English.
- AI thus has enormous potential as a tool for breaking down language barriers in a country like India, with its unparalleled linguistic and cultural diversity, providing internet access in native languages.
- It also provides the benefits of Natural Language Processing (NLP) to MSMEs and individual innovators in the hinterlands. NLP is the ability of a computer program to understand human language as it is spoken and written.
- New announcements: The Agriculture Accelerator Fund was announced recently in the budget 2023-24.
- It will enable the Indian agricultural ecosystem (startups, businesses, and farmers) to work collaboratively and find knowledge-based and farmer-centric solutions.
- It will enormously benefit agricultural sector that employs nearly half the workforce of the Indian economy.
What is the status of investment in social infrastructure?
- It includes education and skilling, public health and nutrition, drinking water, sanitation and other social services.
- Budgetary announcements: The total expenditure of the central government in social infrastructure has increased by 134 per cent from Rs 9.1 lakh crore in 2016 to 21.3 lakh crore in 2023 (BE).
- The budget also announced mission to eliminate sickle cell anaemia by raising awareness about the near-fatal disease and screening 7 crore people in age group of 0 and 40 yrs, immensely benefiting the affected tribal areas.
- It will also lead to a more productive and proficient workforce, reduced mortality, wasting and stunting, increased social mobility and a higher quality of life.
- All these factors contribute to a stronger and more inclusive economy and holistic development.
- Earlier efforts to boost social infrastructure: The Aspirational Districts Programme spearheaded by NITI Aayog also gave attention to backward districts through data-driven governance, resulting in consistent macro improvements in key socioeconomic indicators.
- The emphasis on digital land records under the SVAMITVA Scheme of the Ministry of Panchayati Raj, a structural reform in rural land management has also led to individual economic empowerment.
- The PM National Dialysis Programme recorded a 232 per cent expansion in the Non-Communicable Diseases clinics and 320 per cent expansion in the districts under the programme between 2014 and 2022.
Conclusion
- The concerted thrust on creation, maintenance and expansion of physical, digital and social infrastructure has emerged as a systemic focus of India’s unique development model.
- This infrastructure triad will be the enabler of growth and leveller of opportunities in the dream of a “Viksit Bharat” by 2047 and people must be kept at the focal point of this infrastructure growth story.
Q1) What is Agriculture Accelerator Fund?
It is a digital public infrastructure for agriculture to be built as open source, open standard, and interoperable public good to encourage agriculture-related startups in rural areas.
Q2) What is SWAMITVA scheme?
Survey of Villages Abadi & Mapping with Improvised Technology in Village Areas (SVAMITVA) is a Central Sector scheme under Ministry of Panchayati Raj (MoPR) to provide the ‘record of rights’ to village household owners possessing houses in inhabited rural areas.
Source: CEO NITI Aayog Param Iyer on Budget 2023-24: An infrastructure push for the people | Sansad TV
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