India is on the verge of witnessing a sustained growth in infrastructure buildup. With a slew of announcements in housing, road, port and airport development, we are seemingly on a path of sustained recovery in the economic growth on the back of increased focus on the infrastructure construction in the country.
From a policy perspective, there has been a growing consensus that a private-public partnership is required to remove difficulties concerning the development of infrastructure in the country.
A substantial chunk of the abovementioned investment target is likely to come from the private sector. The government has set up IIFCL in order to finance the PPP projects in the sector.
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IIFCL to refinance 60% of commercial bank loans for PPP projects in critical sectors over the next fifteen to eighteen months. IIFCL and Banks are in a position to support projects involving total investment of Rs.1 trillion.
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Allocation under Jawaharlal Nehru National Urban Renewal Mission (JNNURM) increased by 87% YoY to Rs.1.3 trillion in 2009-10.
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Allocation for housing and provision of basic amenities to urban poor enhanced to Rs.39.7 bn in 2009-10.
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Allocation to National Highways Authority of India (NHAI) for the National Highway Development Programme (NHDP) increased by 23% in 2009-10.
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Allocation under Accelerated Irrigation Benefit Programme (AIBP) increased by 75 % in 2009-10.
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Fringe benefit tax (FBT) abolished.
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Rate of minimum alternate tax (MAT) on book profits has been increased from 10% to 15%, but with a provision of carrying forward the tax credit on MAT to ten years from the current seven years |
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Setting up of IIFCL would enable the funding of large infra projects.
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Increase in allocation in schemes like JNNURM will improve the domestic infrastructure in the country especially the urban areas.
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Increased allocation to NHAI would mean better road connectivity across the country, thus enhancing the trade flow.
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Increase in allocation for AIBP would enable greater irrigation facilities, thereby increasing the agricultural productivity. |
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Companies like Jain Irrigation and Madhucon Projects will benefit from increased outlay in irrigation spending.
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Companies like HCC, IRB Infra and Gammon likely to benefit from the highway development projects. | |
