Major Share for Infra in Budget 2010-11
This year’s Budget has focused on current and future infrastructure development. A staggering amount of Rs. 1, 73,552 crore has been earmarked, almost 46% of the total plan outlay. Bold policy amendments have also been effected to speed up Public Private Partnership (PPP). Allocations for road transport have been increased up to 13% to stand at Rs.19, 894 crore. A total of Rs. 98000 crore has been assigned to improve various sectors of rural as well as urban infrastructure such as transport, water, sanitation. Share of Bharat Nirman and Indira Awas Yojna has been hiked to Rs. 48,000 crore and Rs. 45,000 crore respectively.
In the Budget for 2010-11 India Infrastructure Company Limited (IIFCL) received a huge funding of Rs. 20,000 crore in an effort to boost up national development. In one of the far reaching decisions IIFCL has been granted permission to re-finance bank lending to infrastructure projects. Railways also get Rs. 16,752 crore for development and modernization, Rs. 950 crore more than the previous year. Monorail projects have been granted project imports at a concessional basic duty of 5 per cent. Full import duty exemption and allied machinery used in road construction has also been extended. For Special Economic Zones (SEZ). Budget has provided interest subvention of 2 per cent on pre-shipment export credit up to March 2011. It is expected that thrust on SEZ schemes will lead to accelerated investments in SEZs and will help generate employment and improving infrastructure in SEZs. To help power sector achieve the target of 78, 700MW in the next fiscal Budget has raised allocations for to Rs. 5,130 crore from the current Rs. 2,130 crore, which is more than double from the current fiscal. Allocations to the rural electrification programme under Rajiv Gandhi Grameen Vidyutikaran Yojana are over and above this amount. Budget proposals have also provided a full central excise duty exemption to goods supplied to Ultra Mega Power Projects (UMPPs). Framework for induction of supercritical technology in large capacity power plants has been put in place.
Amendments to National Electricity Policy 2005 and Tariff Policy 2006 have also been announced to reduce generation cost and higher cost of power purchased by distribution companies. A Coal Regulatory Authority (CRA) to ensure smooth supply of coal to power plants has been proposed, too. Since conventional sources of energy are fast depleting, renewable sources assume a high significance. Realizing the importance of renewable energy generation a 61 per cent hike in outlay apart from reducing duties on equipment required for setting up solar photovoltaic and wind energy farms has been proposed. Total outlay has been increased to Rs. 1,000 crore for the next fiscal from Rs. 620 crore in 2009-10. A concessional customs duty and central excise duty of 5 per cent on machinery, instruments, equipment and appliances required for the initial setting up of photovoltaic and solar thermal power generating units has been given. Small hydro and micro power projects at a cost of Rs. 500 crore are to be set up in Laddakh.
To create demand in the badly battered real sector a series of measures have been announced like scheme of one per cent interest subvention on housing loans up to Rs. 10 lakh, where the cost of the house does not exceed Rs. 20 lakh. The Budget has set aside Rs. 700 crore for the scheme. To streamline the taxing system by 2011 unified Goods and Services Tax (GST) has been proposed.
By and large the initial response of the industry to the Budget proposals contain in the new Budget has been positive. But the industry is watching the ground realities before giving it a thumbs up.
In the Budget for 2010-11 India Infrastructure Company Limited (IIFCL) received a huge funding of Rs. 20,000 crore in an effort to boost up national development. In one of the far reaching decisions IIFCL has been granted permission to re-finance bank lending to infrastructure projects. Railways also get Rs. 16,752 crore for development and modernization, Rs. 950 crore more than the previous year. Monorail projects have been granted project imports at a concessional basic duty of 5 per cent. Full import duty exemption and allied machinery used in road construction has also been extended. For Special Economic Zones (SEZ). Budget has provided interest subvention of 2 per cent on pre-shipment export credit up to March 2011. It is expected that thrust on SEZ schemes will lead to accelerated investments in SEZs and will help generate employment and improving infrastructure in SEZs. To help power sector achieve the target of 78, 700MW in the next fiscal Budget has raised allocations for to Rs. 5,130 crore from the current Rs. 2,130 crore, which is more than double from the current fiscal. Allocations to the rural electrification programme under Rajiv Gandhi Grameen Vidyutikaran Yojana are over and above this amount. Budget proposals have also provided a full central excise duty exemption to goods supplied to Ultra Mega Power Projects (UMPPs). Framework for induction of supercritical technology in large capacity power plants has been put in place.
Amendments to National Electricity Policy 2005 and Tariff Policy 2006 have also been announced to reduce generation cost and higher cost of power purchased by distribution companies. A Coal Regulatory Authority (CRA) to ensure smooth supply of coal to power plants has been proposed, too. Since conventional sources of energy are fast depleting, renewable sources assume a high significance. Realizing the importance of renewable energy generation a 61 per cent hike in outlay apart from reducing duties on equipment required for setting up solar photovoltaic and wind energy farms has been proposed. Total outlay has been increased to Rs. 1,000 crore for the next fiscal from Rs. 620 crore in 2009-10. A concessional customs duty and central excise duty of 5 per cent on machinery, instruments, equipment and appliances required for the initial setting up of photovoltaic and solar thermal power generating units has been given. Small hydro and micro power projects at a cost of Rs. 500 crore are to be set up in Laddakh.
To create demand in the badly battered real sector a series of measures have been announced like scheme of one per cent interest subvention on housing loans up to Rs. 10 lakh, where the cost of the house does not exceed Rs. 20 lakh. The Budget has set aside Rs. 700 crore for the scheme. To streamline the taxing system by 2011 unified Goods and Services Tax (GST) has been proposed.
By and large the initial response of the industry to the Budget proposals contain in the new Budget has been positive. But the industry is watching the ground realities before giving it a thumbs up.
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03 March 2010
