States Compete for Development Projects in India’s 2024-25 Budget
New Delhi – State governments across India are poised to compete for a series of major development projects announced in the Union Budget 2024-25, presented on July 23, 2024, by Finance Minister Nirmala Sitharaman. The budget outlines five key initiatives that states can vie for through a “challenge mode” approach, requiring them to present viable projects with necessary land and infrastructure.
According to the budget documents, the initiatives include a city economic development plan with an investment of ₹5,000 crore, the establishment of five university townships, three chemical parks, mega textile parks, and a National Institute of Design. States demonstrating the strongest proposals and implementation capabilities will be awarded these projects.
The Finance Minister reportedly indicated during a press conference following the budget presentation that the availability of land will be a key criterion for selection. States that can quickly identify and prepare land for these projects, particularly for the university townships – which will include multiple universities, colleges, research institutions, and residential complexes – will have a competitive advantage.
The budget also includes a plan to improve infrastructure in Tier 2 and Tier 3 cities, as well as pilgrimage sites. States that can effectively develop and implement city economic sectors will be eligible to receive ₹5,000 crore for development activities.
The mega textile parks are specifically designed to promote the production of technical textiles, catering to industries such as manufacturing and medical/defense sectors. Dedicated chemical parks aim to boost domestic chemical production and reduce reliance on imports. However, securing these projects will be a significant challenge for states.
Andhra Pradesh and Bihar are expected to benefit significantly from the budget, as they are ruled by the Telugu Desam Party and Janata Dal (United), respectively – key allies in the current National Democratic Alliance (NDA) government led by Prime Minister Narendra Modi.
A plan called ‘Purvodaya’ has also been formulated for the all-round development of the eastern region of the country, covering Bihar, Jharkhand, West Bengal, Odisha, and Andhra Pradesh. In Bihar, the budget includes support for the development of an industrial node at Gaya, road connectivity projects totaling ₹26,000 crore (including the Patna-Purnia Expressway, Buxar-Bhagalpur Expressway, and others), a new 2400-megawatt power plant at Pirpainti (costing ₹21,400 crore), and the construction of new airports, medical colleges, and sports infrastructure.
The Union Budget 2024-25 emphasizes inclusive growth, with a focus on women, youth, and farmers. Total receipts, excluding borrowings, are estimated at ₹32.07 lakh crore, while total expenditure is projected at ₹48.21 lakh crore. The government’s financial year 2025 final budget maintains the nominal Gross Domestic Product (GDP) growth assumption from the interim budget, with the Economic Survey projecting a real GDP growth in the range of 6.5% to 7%.
The budget also outlines initiatives to promote investment-ready, plug-and-play industrial parks with complete infrastructure in or near 100 cities, in partnership with states and the private sector, by better utilizing town planning schemes.
