Modi Government’s Infrastructure Overhaul Saves Trillions in Logistics Costs – Sitharaman


Finance Minister Nirmala Sitharaman announced significant savings of Rs 2.4 trillion to Rs 4.8 trillion annually in logistics costs due to the Modi government’s extensive road network expansion over the past decade. Her announcement yesterday underscores the crucial role of infrastructure in driving economic growth and reducing operational expenses for businesses.

Sitharaman criticized the Congress-led UPA government for neglecting infrastructure development during FY05-FY14, which resulted in a lack of essential infrastructure and hindered India’s long-term economic prospects.

Sitharaman said that the Modi government significantly increased Gross Budgetary Support (GBS) capital expenditure to Rs 43.53 trillion since 2014, a 3.72x increase compared to 2004-14. On the other hand, CAPEX rose to over 21% of total expenditure in 2023-24, compared to 12% in 2013-14 and 23% in 2003-04. In between this, the road transport and highway budget allocation saw a 500% increase since 2014, leading to a 60% expansion of the national highway network. Similarly, the allocation for Railways’ CAPEX in 2023-24 increased to Rs 2.43 lakh crore, marking a significant rise compared to previous years.

Sitharaman emphasized the necessity of effective infrastructure development for India’s economic growth. She criticized the Congress-led UPA government’s failure to prioritize infrastructure, leading to missed opportunities, hindering India’s progress and putting border safety at high risk.

“A more glaring outcome of this neglect was the development of border roads and defense capital expenditure, which left India vulnerable to external threats. Then Defence Minister AK Antony remarked in 2013 – An undeveloped border is safer than a developed border,” said Sitharaman on X.

In light of these developments, it’s essential for policymakers to continue prioritizing infrastructure investments to unleash India’s full economic potential and ensure sustainable development.

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