Electric Vehicles as Infrastructure in the New Budget?

India’s Budget Needs Infrastructure Boost

Key Takeaways:

• The upcoming Indian budget, the first under Prime Minister Modi’s third term, is crucial for propelling economic growth and sustainability.
• Increased capital expenditure is essential, not just for traditional areas like roads and railways, but also for airports, urban development, energy, and green initiatives.

According to Industry experts:

• Private Sector Participation: Through privatization and listing, encourage private investment in airports, railways, and dedicated freight corridors. Reduce government stake in rail entities to free up capital.
• Electric Vehicle (EV) Focus: Declare the EV sector as infrastructure and extend benefits under the FAME scheme to accelerate EV adoption.

• Energy Efficiency: Recognize smart meters as infrastructure and improve electricity distribution. Explore central government intervention for struggling state power companies (discoms).
• Green Push: Provide viability gap funding to promote the production of green hydrogen and biofuels.
• Investor Balance: Rebalance tax structures to ensure domestic investors compete fairly with foreign counterparts in infrastructure projects.
• Easing Bank Burden: Establish a new entity to buy bonds from greenfield infrastructure projects and sell them to retail and institutional investors, freeing up bank resources.
• Cash Flow Solutions: Allow infrastructure projects to distribute all available cash to investors, boosting project viability and investor confidence.

By implementing these suggestions, the Indian government can create a more attractive infrastructure landscape, attract investment, and propel the country towards a sustainable and prosperous future.