|
Way paved for more private investment in infrastructure
Roads & Highways
Budget announcements
50 per cent of diesel cess to be allocated for rural roads.Total plan allocation for the roads and highways increased by 93 per cent to Rs 8,787 crore.10-year tax holiday for private players undertaking road projects which may be availed of in the initial 20 years.Tax exemption of interest, dividend or long-term capital gains of an infrastructure capital fund or an infrastructure capital company investing in infrastructure projects.Allocation of Rs 2,500 crore for the Pradhan Mantri Gram Sadak Yojana for better rural road connectivity.Impact of the Budget announcements
Increased private investments are likely to take place in the road sector due to the increase in tax holiday for road projects. Moreover, the infrastructure funds are expected to take greater interests for funding such projects. The allocation of 50 per cent diesel cess for rural roads is likely to channelise much needed funds required for the development of rural connectivity. Ports Budget announcements
10-year tax holiday for private players involved in developing and/or operating and maintaining projects. Tax exemption of interest, dividend or long-term capital gains of an infrastructure capital fund or an infrastructure capital company investing in infrastructure projects.Stress on rationalisation of tariffs in a fair and transparent manner through Tariff Authority for Major Ports and focus on corporatisation of ports.Impact of the Budget announcements
Increased interests of private players for developing and operating and maintaining port projects is likely due to the increase in tax holiday. Access to private funds for undertaking such projects have been eased by allowing tax exemption to interest and long-term capital gains to these infrastructure funds. The stress on rationalisation of tariffs and a focus on corporatisation is expected to yield better results in the medium to long term. Construction Budget announcements
Increase in tax holiday for infrastructure projects.Increased plan allocation for the road sector. Focus on completion of rural electrification in the next six years.The National Housing Bank and Hudco have set apart adequate funds for housing reconstruction in Gujarat. Proposal to allocate a special quota of tax-free bonds of Rs 2,000 crore between the two institutions.Impact of the budget announcements
Construction activity is expected to get a boost from the sops given to the infrastructure sector in terms of increased demand. Reconstruction of housing and infrastructure facilities in Gujarat is likely to increase construction activity in the state. The cost of construction may go down, especially in the coastal areas due to a reduction in the customs duty in cement and clinker. However, the sector still remains plagued with problems of institutional financing and a lack of regulatory framework. Copyright © 2001 Indian Express Newspapers (Bombay) Ltd.
|
