Union Budget 2018-2019 – Impacts and Recommendations

The Union Budget for financial year 2018-19 was presented to Parliament on1 February 2018 by
Finance Minister Arun Jaitley. The budget recognises investment in infrastructure as the key driver
for growth in India. There is focus on the development of network of roads, railways, airports, cities
and ports to provide quality services to people.
1. Railways
A capital expenditure of Rs 1.48 lakh crore was announced for the Indian Railways, with primary
focus on capacity expansion and safety. This is an increase of 68% from 2017-2018 and is the highest
allocation ever for railways. To eliminate capacity constraints, doubling 18,000 km of lines, and
renewal and maintenance of 36,000 km of rail track has been targeted in the coming year.
Modernisation of signalling, elimination of 4,267 unmanned railway crossings on broad gauge routes,
installation of Wifi and CCTVs in trains and stations are proposal to improve on the safety front.
Recommendations:
Continuous investment is required to modernize and regularize the railway network in India.
Initiatives to improve customer experience - restricted entry to platforms, more public facilities on
the platforms, well maintained coaches, irctc website upgrade, faster and efficient resolutions of
complaints and issues – are required to become the popular mode of transport. The next budget
should also focus on schemes and mechanisms to improve emergency response and grievance
redressal systems.

2. Civil aviation
There is an increased budgetary allocation of Rs 6,602.86 crore for civil aviation, with a plan to hike
the Airport capacity to handle 1 billion trips under the NABH Nirman scheme. Two new aircrafts for
VVIPs will take a big chunk of the total civil aviation allocation. Air India would receive a budgetary
support of Rs 650 crore in 2018-2019, a significant decline from Rs 1,800 crore allocated for the
current fiscal, and the Airports Authority of India (AAI) would receive Rs 73.31 crore as opposed to Rs
149.93 crore in 2017-18. The regional connectivity scheme UDAN is expected to connect 56 unserved
airports and 31 unserved helipads across India by increasing the accessibility to air travel.
Recommendations:
The budget should spend more on fronts such as providing cheap and easy accessibility to airports,
new investment in airports and helipads, more support for struggling airline companies, investment
and support for helitaxi start-ups and schemes to protect the exploitation of customers and staff by
the airline companies. There should also be focus on cutting edge digital solutions such analytics and
artificial intelligence to improve service and security.

3. Telecom
The 2018-19 Union Budget saw an allocation of Rs. 10000 crores for creation and augmentation of
Telecom infrastructure. The launch of Bharat Net project - which aims to connect 2.5 lakh gram
panchayats by March 2019 – will provide accessibility to rural India. Five lack wifi hotspots are
proposed to be set up which will provide broadband access to five crore rural citizens. The budget
recognizes that connectivity with rural India will be the key driver for the success of schemes like
Digital India , start-up India and Make in India. . Niti Aayog is set to establish national programs for
research, and development in areas like AI and AI based applications. Rs 3,073 crore has
been allocated for the Department of Science and Technology (DST) for the
development of new digital technologies in the country like machine learning, artificial
intelligence (AI) and Internet of things (IoT). There is focus on moving to next generation
5G technology – proposal for establishment of indigenous 5G centres with IIT Madras.
Recommendations:
Owing to the ‘Jio Effect’, 2017-2018 fiscal saw a drastic fall in profit, growing
competition, piling up of debt, and near extinction of several mid-size telecom operators.
The next budget should have sufficient allocations and incentives to support such
operators to survive predatory pricing. Also , regulations must ensure customers are not
exploited by operators and that prices are not controlled by a single company.

4. Roads
The ambitious Bharatmala Pariyojna, which is expected to provinde seamless
connectivity to interior and backward areas and borders of the country, will see the
construction and development of about 35,000 km in phase 1. The total cost is to be
around 5.35 lakh crore. An additional Rs1.57 lakh crore will be used in maintenance and
widening of existing projects. Road network and accessibility are the key drivers for
growth of infrastructure and business in India. The NHAI is set to organisze its road
assets into special purpose vehicles, with the use of innovative monetising structures like
Infrastructure Investment Funds (InvITs) andToll Operate and Transfer (TOT), to raise
equity from the market for its matured assets. The highway award targets have been
revised to 10,000km and the total union expenditure on roads will be Rs6.92 lakh crore
over the next five years.
Recommendations:
There should be allocations for improving the electrification and lighting of roads.
Regulations and mechanisms are required to ensure the timely completion of the various
projects (the gap between award and construction was 6,000km in 2016-17. Focus should
be given to construction practices and technology to improve the poor construction rate
of 27-28km per day.

5. Cities
2018-19 Union budget saw a marginal increase of 2.8 % – from Rs40,617 crore in 2017-18 to
Rs41,765 crore – in the allocation for the Union Housing and Urban Affairs ministry. 99
cities were selected under the ambitious Smart city mission at a cost of Rs 2.04 lakh crore
for the program. The ambitious Smart city mission - the government’s flagship scheme in
the area of urban renewal – would also harness the power of the Information
Communication Technology (ICT) . While 189 projects amounting to close to Rs 2,235
crore have already been completed under the mega program, there are more than 2,500
projects worth over Rs 1.35 lakh crore underway.The Affordable Housing Fund (AHF) has
been launched with universal housing as the aim. Rs 77,640 crore for 500 cities have
been approved under the Atal Mission for Rejuvenation and Urban Transformation
(AMRUT) plans.
Recommendations:
Schemes and systems to make cities safe, inclusive, resilient and sustainable. Allocation
is also required for schemes to improve the planning of cities, reduce the pollution levels
and for sustainable growth.