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Date 2023-09-10

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ABSTRACT
India is a nation of immense potential, with its wealth of land, resources, and population that serve as key drivers of
economic growth. To fully unlock this potential, India must build upon its infrastructure. Infrastructure projects are massive
investments that provide longterm economic returns. They allow people to travel, goods to be transported, and businesses
to generate greater profit. However, these investments are also incredibly costly. The taxation of infrastructure projects in
India, then, is of utmost importance as it can help to reduce the financial burden on the people and businesses while also
allowing the government to benefit from the proceeds. While taxation of infrastructure projects in India has generally been
deemed necessary, there have been various controversies surrounding the rate and scope of taxation. This research article
will explore the taxation of infrastructure projects in India, addressing the implications of the taxation system on economic
growth and development, as well as how it has been met with protests and criticisms.
INTRODUCTION
Infrastructure development is of paramount importance for India as it helps to improve the quality of life and create
economic opportunities. Taxation can also be used to help fund the construction and maintenance of infrastructure
projects, which is an area of great debate in India. Taxation means a government's levying of a wide variety of taxes in
order to generate revenue to pay for public services such as infrastructure. Many believe that taxation of infrastructure
projects should be increased to cover a larger portion of the development costs, while others argue that taxes should
remain low to prevent a burden on companies and encourage the private sector to invest. Furthermore, there are those
who advocate for the taxation of infrastructure projects to be used to fund public services such as health care and
education. Each of these perspectives has its own merits and drawbacks, and the debate over taxation of infrastructure
projects in India is something that will continue to be discussed for many years to come.
INFRASTRUCTURE
The expansion of the Indian economy as a whole is significantly fuelled by infrastructure. The infrastructure sector
encompasses a number of important infrastructure sectors, including urban infrastructure, roads and bridges, dams, and
power.
The goods and services that demand a higher degree of investment and are thought to be essential for an economy's
smooth operation are referred to as the infrastructure of an economy.
Similar to how protein is the lifeblood of the human body, infrastructure is the "lifeline" of an economy. A sufficient level of
infrastructure is necessary for growth and development regardless of the primary, secondary, or tertiary driving factor of an
economy.
The development of the sector has therefore always been prioritized by the Indian government.
TAXATION
A tax is a financial burden placed on people or on those who own property to contribute to the government's earnings.
Taxes are the main and greatest source of income for the government. The government use the tax money for a variety of
programmes designed to advance the nation.
The Indian tax system is effectively structured with a three-tier federal framework.
The central government, state governments, and local municipal entities make up the tax structure. Direct tax and indirect
tax are the two types of taxes used in India. Value-added tax, service tax, goods and services tax, customs fee, etc. are

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examples of indirect taxes. While direct taxes are levied directly, such as on income, gifts, capital gains, etc.
CURRENT TREND OF INFRASTRUCTURE DEVELOPMENT IN INDIA
India's infrastructure is in a state of flux, and the provisioning of infrastructure services is steadily moving away from the
realm of government to that of private sector. The Government of India has set an ambitious target of investing $1.4
trillion in infrastructure between 2019 and 2023 to achieve sustainable national development. In order to further stimulate
growth, the National Infrastructure Pipeline was introduced in 2019, setting an emphasis on social and infrastructure
projects such as energy, roads, railways, and urban development worth 102 lakh crores. This was split between the Centre
and States with nearly equal contributions and the private sector with a 21% share. Numerous road infrastructure projects,
gas pipeline initiatives, and industrial expansion have all been ongoing since 2019. Some of the more notable projects
include the Chenab rail bridge, expected to be completed by the end of 2022, the Mumbai to Delhi Expressway, the 597-
foot Statue of Unity in Gujarat, and the Bandra-Worli Sea Link, a cable-stayed bridge located in Mumbai. In addition,
Punjab Farmer has given up wheat farming to grow exotic flowers, earning Rs 1 Lakh/Acre. Despite the progress, reports on
cost overruns and delays in infrastructure projects have caused disputes in recent years. Moreover, due to resource
constraints, Panigrahi and Beura (2013, 405) emphasised that India's infrastructure deficit is the major obstacle to achieving
economic growth. With the hope of multiplying the effects and boosting GDP growth above 8%, India is focusing on
infrastructure spending, which is essential to the economic development of the nation and is ultimately key to putting
India's infrastructure sector back on a firmer footing.
TAXATION SYSTEM IN INDIA FOR INFRASTRUCTURE PROJECTS
The taxation system in India for infrastructure projects is complex and often daunting. Dual taxation, high rates, and other
factors can place a heavy burden on infrastructure projects. This is because taxes are levied both by the Central
Government and the State Governments, along with local authorities such as the Municipality and Local Governments.
Companies involved in infrastructure and power sectors are exempt from paying Minimum Alternative Tax, or MAT, which
stands at 18.5%, however this can change depending on the specific project.

Matched Source

Similarity 3%
Title:byjusexamprep.com › upsc-exam › taxation-in-indiaTaxation in India: History, Types, Laws | Tax System in India
Sep 6, 2023 · The Indian tax system is effectively structured with a three-tier federal framework. Taxation in India is a payment
transfer that the government of the nation collects from people or any other taxable entity for the growth and security of the
country.
https://byjusexamprep.com/upsc-exam/taxation-in-india/

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