Indian Economy News

Modi 3.0: Continued capex push for infra, bullet train among priorities

  • IBEF
  • June 10, 2024

The coalition government’s evolving dynamics could shift priorities for new ministers overseeing key aspects of Prime Minister Mr. Narendra Modi’s economic policy—specifically, infrastructure and railways. Insiders predict that the capital expenditure (capex) push will maintain momentum, with minor shifts in inter-sectoral priorities. The new railway minister is tasked with executing several initiatives within the Centre’s 100-day agenda, including enhancing capacity and safety infrastructure, introducing bullet trains, and improving the digital user experience via a super app. There may be a heightened focus on direct employment generation within the national transporter, reversing a decade-long trend of outsourcing non-core jobs to manage rising pension costs. The ministry also aims to address migrant labourers’ issues in general coaches by increasing non-AC coach capacity, following criticism of neglecting the underprivileged. Additionally, the introduction of sleeper Vande Bharat trains for long-distance journeys and the completion of the Udhampur-Srinagar-Baramulla Rail Link project, featuring the Chenab Bridge, are on the agenda.

For the Ministry of Road Transport and Highways, expediting approval for its US$ 240.36 billion (Rs. 20 trillion) Vision 2047 highway plan is crucial. A senior official highlighted that the ministry’s capital expenditure plans depend on this approval, which has been delayed while waiting for the new government. In 2023, the ministry reported to the Cabinet that delayed approvals for revised cost estimates of the Bharatmala Pariyojana’s first phase had impeded highway project awards, with costs doubling to over US$ 127.39 billion (Rs. 10.6 trillion by 2022). The ministry has consolidated all pending Bharatmala projects, Phase II, and new proposals into one cabinet note, currently under high-level review. Despite potential coalition government challenges, officials remain optimistic about the highway plan’s priority status. In the near term, the ministry must construct over 1,700 km of highways and award over 3,000 km in the next three months, alongside the test launch of a hydrogen fuel cell vehicle.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.