Union Budget: Infra sector calls for raised capex, sops for green projects, tax reforms

New Delhi [India], January 28 (ANI): Just days ahead of the Union Budget 2025 on February 1, the infrastructure sector players are calling for GST rationalisation, tax incentives for green building technologies, increased capital expenditure (capex) for roads, railways, and ports, support for public-private partnerships (PPPs), and skill development programs to address workforce gaps in construction and infrastructure sectors.
The industry players in the infrastructure sector -- from construction to real estate, transportation, and urban development -- also emphasised the need for fiscal reforms and policies that would ease the burden on infrastructure projects.
Arvind Nanda, Managing Director of Interarch Building Products, highlighted the importance of tax relief, particularly for pre-engineered buildings (PEBs) across industrial projects.
"Extending Input Tax Credit (ITC) benefits for PEBs would reduce project costs, promote eco-friendly building solutions, and drive industrial progress," Nanda said. He also called for larger investments in skill development under the 'Skill India' mission to address talent gaps in the construction sector.
"The sector would benefit immensely from boosting infrastructure funding, reviving private sector participation and building green infrastructure. Furthermore, encouraging investments in renewable energy, skill development, and green technology adoption will ensure that infrastructure growth aligns with the nation's sustainability goals," said Bhagat Singh, Group CFO, Ceigall India Limited.
Vivek Iyer, Partner at Grant Thornton Bharat, highlighted the importance of rationalizing capital expenditure schemes across states to ensure balanced growth.
He recommended tweaking allocations based on the developmental needs of different states, aligning fiscal policies with long-term infrastructure goals.
""The Centre's Capital Expenditure scheme for states in the form of a 50 year interest free loan had been specified to boost sustainable and balanced growth within States, that will in turn lead to development of the country," 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.
"An increase in capex for the roads sector by up to 10 per cent, alongside a greater push for BOT (Build-Operate-Transfer) projects, would stimulate private investment and boost infrastructure development," Suman noted.
In urban infrastructure, the focus is on revitalising public-private partnerships (PPPs) to boost funding for Tier 2 and Tier 3 cities.
Suman pointed to the stagnation in PPP investments in urban infrastructure, calling for innovative models to encourage private sector participation.
He suggested better utilization of the Urban Infrastructure Development Fund (UDIF) and strengthening the municipal bonds market to address funding challenges faced by urban local bodies (ULBs).
Priya Rustogi, Leader for India & Subcon at LWT IMEA, emphasised the potential of India's 6.5% GDP growth forecast and added, "The focus on affordable housing and infrastructure development, coupled with urbanisation, will drive demand for modern, sustainable, and high-quality bathroom solutions".
She called on the government to rationalise GST rates on sanitaryware and promote sustainable construction practices to align with environmental goals.
Kuldip Raina, Director of Shalimar Paints, echoed similar sentiments, particularly regarding the growth in decorative and industrial paints.
"We also advocate for policies that stabilise raw material supply, encourage R&D through tax benefits, and provide subsidies for technological upgrades. These steps will reduce production costs, lower energy expenses, and enable greater industry participation," Raina added. (ANI)